German 10-year government bond yields were near the lowest in more than a month as Moody’s Investors Service put Irish debt on review for a possible downgrade and the Bank of Japan stepped up asset purchases.
Irish bonds fell relative to German securities. Moody’s said a one-step downgrade to Aa3, is most likely. The BOJ pledged to keep its benchmark interest rate at “virtually zero” until the end of deflation is in sight and to expand its balance sheet to shore up the economy. U.S. Federal Reserve Chairman Ben S. Bernanke stoked speculation the central bank is planning to increase so-called quantitative easing.
“The Moody’s review has added to the positive sentiment for bunds, but Ireland is on review by the market 24/7,” said David Schnautz, a fixed-income strategist at Commerzbank AG in London. “The BOJ’s actions have spilled over into Treasuries and bunds.”
The yield on the 10-year bund fell 4 basis points to 2.22 percent as of 8:17 a.m. in London. The 2.25 percent security due September 2020 rose 0.29, or 2.9 euros per 1,000-euro ($1,371) face amount, to 100.305. Two-year yields dropped 3 basis points to 0.81 percent.
The Irish-German 10-year yield spread widened 4 basis points to 407 basis points. It reached a record 454 basis points on Sept. 29.
To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
http://jodnet.blogspot.com
Irish bonds fell relative to German securities. Moody’s said a one-step downgrade to Aa3, is most likely. The BOJ pledged to keep its benchmark interest rate at “virtually zero” until the end of deflation is in sight and to expand its balance sheet to shore up the economy. U.S. Federal Reserve Chairman Ben S. Bernanke stoked speculation the central bank is planning to increase so-called quantitative easing.
“The Moody’s review has added to the positive sentiment for bunds, but Ireland is on review by the market 24/7,” said David Schnautz, a fixed-income strategist at Commerzbank AG in London. “The BOJ’s actions have spilled over into Treasuries and bunds.”
The yield on the 10-year bund fell 4 basis points to 2.22 percent as of 8:17 a.m. in London. The 2.25 percent security due September 2020 rose 0.29, or 2.9 euros per 1,000-euro ($1,371) face amount, to 100.305. Two-year yields dropped 3 basis points to 0.81 percent.
The Irish-German 10-year yield spread widened 4 basis points to 407 basis points. It reached a record 454 basis points on Sept. 29.
To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
http://jodnet.blogspot.com
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