Bonds: Treasuries slide again



LONDON (ShareCast) - Yields and basis point (bp) movements of some of the most-watched 10-year bonds this afternoon:

US: 1.94% (+2 bp)
Germany: 1.53% (+6 bp)
UK: 2.11% (+5 bp)
France: 2.14% (+2 bp)
Italy: 4.27% (+4 bp)
Spain: 5.06% (+4 bp)

[NOTE: there are 100bp to a percentage point]

US Treasuries fell again today as the country's December jobs report disappointed those who had expected a much better number in light of ADP figures yesterday.

UK and German bonds duly followed suit.

New US jobs increased by 155,000 and the November (Xetra: A0Z24E - news) number revised up to 161,000 from 146,000.

The ADP report estimated that the US had added 215,000 private-sector jobs in December, beating analysts expectations.

This combined with hawkish comments from the Fed minutes over its bond buying programme to ensure the Treasury slide continued.

Michael Hewson from CMC Markets commented: "It was the slight increase in the unemployment rate to 7.8% that saw investors take the view that the Fed would be unlikely to step back from QE anytime soon, given the comments that they would only reconsider if there was a "substantial improvement" in the unemployment rate".

According to analysis by Bloomberg, US government securities maturing in 10 years and longer handed investors a 4.72% in the past month.

This was the biggest decline of 144 debt indices tracked by Bloomberg and the European Federation of Financial Analysts Societies.