Bonds round-up: Slow recovery boosts US bonds

LONDON (ShareCast) - US Treasuries rose as expectations of a slow economic recovery heightened.

There were sharp differences between various Treasuries. The sharpest movement came from seven-year bonds where prices rose by more than $1 and yields fell by nearly 22 basis points to 3.02%. Ten-year Treasury yields fell seven basis points to 3.42%.

The US government has sold $116bn of bonds this week. That includes $31bn of seven-year bonds.

Ten-year gilt yields fell six basis points to 3.61%. The two-year yield fell five basis points to 0.85%.

Consumer confidence is the highest it has been in the UK for 21 months but it remains relatively weak. The GfK/NOP consumer confidence index improved to -13 in October. The overall positive trend is described as "still fragile" by Rachel Joy, an analyst at GfK. The index related to the economic outlook fell 1 to +3. That is the second positive figure since June 1999 so it is a decline from a high point.

Lower than expected German retail sales and higher unemployment pushed German bund prices higher. Ten-year bund yields fell nine basis points to 3.23%, while two-year yields declined by six basis points to 1.29%.

The number of unemployed in the 16 country eurozone rose by 184,000 to 15.3m in September - equivalent to 9.7% of the working population. Unemployment more than doubled in Latvia and trebled in Estonia.