Bonds round-up: Bonds wither in equities' shadow
With equities back in favour, government bonds were neglected today.
In the US, hopes that the worst of the financial crisis may be over now were given a boost by Washington Mutual, the largest savings and loan company in the US, announcing a possible $5bn cash injection from a group led by private-equity firm TPG.
Yields on the benchmark 10-year treasury note climbed 7 basis points to 3.54%.
The Treasury Department said it plans to auction $6bn of 10-year inflation linked debt this week on April 10.
In Europe, bonds also gave way to equities, with hard-line comments from European Central Bank president Jean-Claude Trichet appearing to extinguish any near-term prospects of a rate cut.
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Trichet claimed that the euro zone had performed resiliently in the first quarter, despite the slowdown in economic activity in the US.
The benchmark European bund saw its yield rise 6 ticks to 4.02%, after Trichet emphasised that "fighting inflation is key" to sustainable economic growth.
Sentiment was further soured by an unexpected rise in German industrial production in February. Output rose 0.4%, when economists had been expecting a decline of similar magnitude.
In the UK, gilts were also weaker, despite the prospect of a rate cut this week. Although the Bank of England is expected to lop a quarter of a point off its reference lending rate, there is enough concern doing the rounds about inflation to cloud the issue.
The yield on the 10-year gilt rose 5 basis points to 4.49%.
