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Bonds round-up: Mediums shunned despite equity collapse
Mon, 01 Dec, 2008
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Bonds round-up: Mediums shunned despite equity collapse
Fri, 10 Oct 2008, 16:43:00
Fears that the market will be flooded with government debt as the US administrations commits increasingly mind boggling amounts of money to stabilising the financial system sent the prices of US Treasuries tumbling.
With equity markets in freefall, US government bonds might ordinarily expect to have benefited from a flight to safety, but with currencies also extremely volatile, investors have steered clear of government debt.
Yields on US Treasuries rose, with the yield on the 10-year note climbing 11 basis points.
Yesterday the US auctioned $20bn in notes plus $30bn of 97-day bills, with more auctions to come at the endof the month.
In Europe, shorter dated bonds advanced while mediums fell back. The yield on the two-year bund fell 7 ticks to 3%, while the ten-year bund saw its yield advance 10 basis points to 3.98%.
The situation was much the same in the UK where the benchmark two-year gilt's yield fell 9 basis points to 3.52% while the yield on the benchmark 10-yeqr gilt rose 9 ticks to 4.46%.
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