Bonds round-up: Economy slowdown bolsters bonds
Government bonds are in demand on both sides of the Atlantic as equities fall out of favour.
Gilts power ahead after more evidence of house prices waning. Recent interest rate cuts appear to have had little impact on the UK housing market following a bigger than expected drop in house prices during February, the fourth consecutive monthly decline.
Figures from the Nationwide Building Society revealed that prices fell 0.5% from January, taking annual growth down to 2.7%, the lowest since November 2005.
Analysts had been expecting a flat read for the month and a slip to 3.6% year-on-year from last month's read of 4.2%.
Meawhile, mortgage approvals for home purchases inched up to 74,000 last month from December's all-time low of 72,000, data from the Bank of England revealed.
The yield on the benchmark 10-year gilt tumbled 12 basis points to 4.48%.
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In the US, treasuries advanced briskly, pushing two-year yields down to their lowest level in almost four years, as investors baled out of equities.
Comments by Federal Reserve chairman Ben Bernanke yesterday that some small US banks could go broke engendered nervousness among equity investors and increased the appeal of government-backed securities.
The yield on the benchmark 10-year treasury note fell 10 basis points to 3.57%.
European government bonds followed their US counterparts lower, on concerns that the slowdown in the US economy will have a knock-on effect on Europe.
Economic confidence in the euro zone slipped in February, with the index of executive and consumer sentiment sliding to 100.1 from 101.7 in January.
The yield on the benchmark 10-year bund eased 10 basis points to 3.9%.
