Bonds round-up: Gilts little changed after inflation data
It is a relatively quiet day for government debt, with UK and European bonds easing slightly while US Treasuries are mixed.
Gilts retreated after UK consumer prices showed a 2.1% annual increase in November, unchanged from October.
The November figure was lower than expected, giving the Bank of England a modicum of wiggle room regarding future interest rate cuts. Nevertheless, prices remained in arrears, and the yield on the 10-year gilt crept up 2 basis points to 4.77%.
In Europe, government bonds failed to hold on to early gains on the day the European Central Bank pumped $500bn into the European banking system. The action had the desired effect of slicing 50 basis points off the rate the banks charge each other for two-week loans in euros.
The yield on the 10-year bund edged higher by one basis point to 4.30%.
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In the US, November housing data came in close to consensus and the absence of nasty shocks left US Treasuries little changed.
November housing starts declined after October's surprise gain. New housing starts fell 3.7% to an annual rate of 1.187m in November, from a revised October figure of 1.232m in October, though the fall was less severe than forecast.
Building permits, regarded as an indicator of future housebuilding activity, fell 1.5% to an annual rate of 1.152m in November from 1.17m in October.
Shorter dated Treasury notes fell back, pushing the yield on the 2-year Treasury note up 3 basis points to 3.20%, but the 10-year Treasury note saw its yield fall 2 basis points to 4.13%.
