European Bonds Advance Amid Stimulus Bets as France Absorbs Cut European government bonds advanced as Federal Reserve Chairman Ben S. Bernanke quelled concern that a reduction of U.S. stimulus was imminent, boosting demand for fixed-income assets around the world. German 10-year yields fell to the lowest in six weeks. Spain’s securities rose as borrowing costs fell at a 3.1 billion-euro ($4.07 billion) sale of debt maturing between 2016 and 2023. France’s 10-year yield dropped to the least in a month even after Fitch Ratings cut the nation’s credit ranking last week. Portuguese bonds gained for the first time in nine weeks after President Anibal Cavaco Silva said he remains confident the nation can overcome political turmoil. “Bernanke clarifying his position on when and how QE will be tapered has certainly helped” European bonds, said Thomas Rahman, a strategist at RIA Capital Markets Ltd. in Edinburgh. “Actions from central banks continue to be supportive for the Bond markets. In the eurozone, the recent shocks appear to be relatively contained.” Germany’s 10-year bund yield dropped four basis points, or 0.4 percentage point, to 1.52 percent at 5 p.m. London time yesterday, when it touched 1.50 percent, the lowest since June 7. The 1.5 percent bond due in May 2023 rose 0.36, or 3.60 euros per 1,000-euro face amount, to 99.82. Bernanke told the Senate Banking Committee on July 18 that it was “way too early to make any judgment” about tapering asset purchases in September. The previous day, he said told the House Financial Services Committee that the central bank’s quantitative easing is “by no means on a preset course.” bloomberg/news/2013-07-20/european-bonds-advance-amid-stimulus-bets-as-france-absorbs-cut.html
Posted on: Sat, 20 Jul 2013 10:14:35 +0000