Bonds round-up
Falling equity markets and continued concern over the fall-out from the liquidity crisis bolstered demand for government debt today.
In the UK gilts advanced ahead of this week's interest rate verdict from the Bank of England. The yield on the 10-year gilt fell 5 basis points to 4.53%.
Meanwhile, the Debt Management Office said its auction of £2.5bn Treasury 5.25% 2012 was covered by bids 2.53 times, with the highest accepted price £102.77, giving a yield of 4.563%. The lowest accepted price was £102.66, giving a yield of 4.59%.
European bonds were also strong, as fears grow over a slowdown in the European economy.
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EU Monetary Affairs Commissioner Joaquin Almunia warned today that Europe's economic growth rate may dip below 2% next year for the first time since 2005.
Higher than expected European producer-price inflation in October had little impact on prices. The 10-year bund saw its yield slip 5 basis points to 4.02%.
In the US, Treasuries were virtually unchanged, despite concerns over the inexorable rise in the three-month London Inter-bank Offered Rate for dollars, which hit 5.15% today.
The yield on the 10-year Treasury note improved by one basis point to 3.86%.
