Bonds round-up: Dire house price data perks up gilts
Gilts moved hesitantly higher today against a background of mixed economic news, with UK unemployment falling to its lowest level since the days of Harold Wilson as Prime Minister while house prices are falling at levels not seen since the John Major era.
The number of people claiming jobseeker's allowance dropped by 6,400 last month to 807,700, said the Office for National Statistics (ONS), more than the 5,000 fall expected.
The Royal Institution of Chartered Surveyors (RICS) said 49.1% more surveyors saw price falls in December than reported a rise. This is the gloomiest balance recorded since November 1992.
The figures were interpreted as being broadly favourable to the prospect of an interest rate cut next month. The yield on the 10-year gilt fell accordingly, dipping 2 basis points to 4.37%.
European bonds advanced more convincingly, as investors continued to cold-shoulder equities.
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Prices moved higher despite the annual euro zone HICP inflation rate being confirmed at 3.1%. The yield on the 10-year bund tumbled 6 basis points to 3.96%..
US treasuries were little changed, with the higher than expected US consumer prices data failing to encourage the bonds bears.
US consumer prices rose 0.3% in December, following a 0.8% increase the month before. Economists had been expecting a December rise of 0.2%.
Figures revealed that international demand for US government debt rose by $23.5bn in November, after rising $49.8bn in October.
