Bonds round-up: HSBC news sparks rally
Bonds markets saw little movement today as earlier losses were reversed after HSBC revealed it is to inject up to $35bn to support its two sub-prime specialists Cullinan and Asscher to stop any possibility of a forced liquidation.
Under the plan, HSBC will consolidate Cullinan and Asscher, which specialise in structured investment vehicles, onto its balance sheet and establish new debt funding. Investors will be offered the option to exchange their existing income notes and mezzanine notes for notes issued by one or more new vehicles.
In the US, prices recovered after initially declining in the wake of US retail sales figures for the day after Thanksgiving which were 8.3% than on the corresponding day of last year. Footfall was up, but on an individual basis shoppers spent less on average this year.
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After the HSBC announcements, bond prices recovered and the benchmark 10-year Treasury note was virtually unchanged.
In the UK, the 10-year gilt was also unchanged while in Europe the 10-year bund fell into line and also stayed close to its Friday night level.
