Bonds round-up: Bonds fall back
Government bonds eased back today, as the spotlight returned to equities.
US treasuries declined ahead of this week's monster debt auctions. The US government is auctioning $13bn of 10-year notes on 6 February and $9bn of 30-year bonds on 7 February.
Positive news on US Factory Orders, which grew 2.3% in December after rising 1.7% in November, also quashed the appeal of government debt. The yield on the benchmark 10-year treasury note rose 5 basis points to 3.64%.
In the UK, gilts fell back ahead of the Bank of England's interest rate decision this week. Most observers think the Bank will restrict itself to a quarter point cut. The yield on the 10-year gilt rose 3 basis points to 4.51%.
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European government bonds were marginally softer as wholesale prices edged higher, keeping the spotlight on the inflation risk inherent in the European economy - a risk that is deterring the European Central Bank from chopping interest rates.
Factory-gate prices in December were 4.3% higher than a year earlier, after showing an annual gain of 4.2% in November.
The yield on the benchmark 10-year bund rose one basis point to 3.93%.
