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European bonds may gain - 2006/10/24 14:11
European government bonds may gain as economic reports in Italy and France suggested consumption will weaken in the region, reducing the odds of higher interest rates.
Yields on German two-year bonds, which move inversely to prices, slipped from the highest in more than four years on speculation that growth in the $10 trillion euro-region economy will start to slow. Spending on manufactured goods in France fell last month by the most in 10 years, the government said today.
Yields on benchmark German 10-year notes fell 1 basis point to 3.87% as of 12:36 p.m. in London. The price of the 4% security due July 2016 rose 0.04, or 40 euro cents per 1,000 euro ($1,260) face amount, to 101.01. The two-year yield was little changed at 3.72%, after rising to as high as 3.74%.
Consumer spending, making up about 15% of the French economy, fell 2.7% in September. A survey of economists had anticipated a 1.3% slide.
Italian consumer confidence dropped to 108.6 in the month, from 110.1 in August, a separate report showed today. That was lower than the 109.8 median forecast among economists.
A release today may also show business confidence in Belgium, considered a leading indicator for Europe, slipped in October.
The Belgian index will decline to 4 from 4.5 in September, based on the median estimate in a survey. The report is due at 3 p.m. Brussels time.
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