Bonds round-up: Weak US manufacturing data boosts bonds
A weaker than expected read on US manufacturing weighed on equity investor sentiment and sparked strong demand for government debt.
The Institute of Supply Management's manufacturing index unexpectedly dropped to 47.7 in December from 50.8 in November. 50.0 is the mark between contraction and expansion. The weak reading raised hopes of another US interest rate cut later this month. As prices rose, the yield on the 10-year Treasury note tumbled 13 basis points to 3.89%.
(Article continues below)Advertisement
European bonds tracked their American counterparts, with the 10-year bund seeing its yield trimmed 11 basis points to 4.21%. In the UK, where the equity market had been in positive territory for most of the day, the gains on gilts were not so marked, but even so the yield on the 10-year gilt declined 6 basis points to 4.45%.
The UK will sell £2.25bn of 4.75 percent gilts maturing 2030 on 8 January, the Debt Management Office said today.
