Fleursdumal
फूल की बुराई
Euro debt-Yields fall as oil prices rise, US jobs data looms
By Sabrina Ghani
LONDON, Aug 5 (Reuters) - Ten-year euro zone government bond yields hit three-month lows on Thursday, as rising oil prices conspired with many banks lowering their forecast for the key U.S. non-farm payrolls data due on Friday to push prices higher.
IPE Brent crude <LCOc1> headed back towards record highs as renewed concern about the finances of Russian oil major YUKOS fuelled a correction from the previous session's steep decline, traders said. The oil price rise is supporting bonds as it is seen hurting consumer spending and growth.
At the same time, U.S. data on Wednesday showed that the employment component of the U.S. services sector shrank, leading some banks to revise down their forecasts for the closely-watched jobs data.
"The market consensus for the non-farm payrolls data has moved after yesterday's ISM's employment component shrank. This and a rise in oil prices are supporting bonds," said Peter Fertig, chief fixed income analyst at Dresdner Kleinwort Wasserstein.
"A rise in oil prices reduces the purchasing power of consumers and it is regarded as demand deflationary, which means it reduces the case for aggressive rate rises."
At 1525 GMT, the 10-year Bund yield <EU10YT=RR> was down 2.1 basis points at 4.149 percent, having hit a new three-month trough of 4.139 percent. The interest rate sensitive two-year Schatz yield <EU2YT=RR> was down 2.2 basis points at 2.532 percent, hitting a two-month low of 2.521 percent.
Data showing German industrial orders fell by a much larger-than-expected 3.5 percent month-on-month in June helped the market recover from early selling.
A rise in oil prices and last-minute position adjustment before the jobs data further boosted the market.
Weak jobs data would affect the Federal Reserve's view that June's slowdown in hiring was temporary.
"If oil prices go up this is good for bonds as people think oil prices will undermine the consumer and so are bad for the economy," said one Frankfurt bond trader.
Meanwhile, the ECB said that euro area bank loans and some mortgage-backed securities will be added to the new list of assets acceptable as collateral in its money market operations.
Analysts said this would increase liquidity in the repo market and would not hurt government bonds.
"I don't think it is a surprise. They always wanted to have a large base for collateral," said Nathalie Fillet, senior analyst at BNP Paribas.
"I don't think it will impact the government bonds market. In fact it will make the repo market more liquid. People who were previously unable to access it will now be able to access it. It is probably positive for the mortgage backed securities and should not have any impact on government bonds."
ECB ON HOLD
Meanwhile, the European Central Bank announced a widely expected decision to keep interest rates on hold at 2.0 percent. The Bank of England, in contrast, lifted UK interest rates a quarter point to 4.75 percent in a widely anticipated move.
"The ECB rate outcome is a non-event for the market and we don't even have a press conference this month," said Audrey-Childe Freeman, senior economist at CIBC World Markets.
"It is a week where oil prices have dominated the headlines and now focus is turning to the (U.S.) non-farm payrolls report, so the market will trade on a quiet note ahead of those numbers."
The September Euribor <FEIU4> interest rate future was up 0.5 basis points at 97.860. Money markets price in about a 60 percent chance of a quarter point rate hike by year-end.
September Bund futures <FGBLU4> was up 18 ticks at 114.84, having hit a four-month high of 114.94 earlier.
Security concerns were never far from the market's mind and a top British navy officer was quoted as saying on Thursday that intelligence showed al Qaeda planned to target merchant shipping to disrupt world trade.
The news had no impact on the market, although earlier this week safe-haven bonds got a boost from a decision by U.S. authorities to issue a "high" level threat alert.
Bunds were steady against Treasuries, with the 10-year yield gap unchanged at 30 bps. The 10-year euro swap spread was steady at 11 bps.
By Sabrina Ghani
LONDON, Aug 5 (Reuters) - Ten-year euro zone government bond yields hit three-month lows on Thursday, as rising oil prices conspired with many banks lowering their forecast for the key U.S. non-farm payrolls data due on Friday to push prices higher.
IPE Brent crude <LCOc1> headed back towards record highs as renewed concern about the finances of Russian oil major YUKOS fuelled a correction from the previous session's steep decline, traders said. The oil price rise is supporting bonds as it is seen hurting consumer spending and growth.
At the same time, U.S. data on Wednesday showed that the employment component of the U.S. services sector shrank, leading some banks to revise down their forecasts for the closely-watched jobs data.
"The market consensus for the non-farm payrolls data has moved after yesterday's ISM's employment component shrank. This and a rise in oil prices are supporting bonds," said Peter Fertig, chief fixed income analyst at Dresdner Kleinwort Wasserstein.
"A rise in oil prices reduces the purchasing power of consumers and it is regarded as demand deflationary, which means it reduces the case for aggressive rate rises."
At 1525 GMT, the 10-year Bund yield <EU10YT=RR> was down 2.1 basis points at 4.149 percent, having hit a new three-month trough of 4.139 percent. The interest rate sensitive two-year Schatz yield <EU2YT=RR> was down 2.2 basis points at 2.532 percent, hitting a two-month low of 2.521 percent.
Data showing German industrial orders fell by a much larger-than-expected 3.5 percent month-on-month in June helped the market recover from early selling.
A rise in oil prices and last-minute position adjustment before the jobs data further boosted the market.
Weak jobs data would affect the Federal Reserve's view that June's slowdown in hiring was temporary.
"If oil prices go up this is good for bonds as people think oil prices will undermine the consumer and so are bad for the economy," said one Frankfurt bond trader.
Meanwhile, the ECB said that euro area bank loans and some mortgage-backed securities will be added to the new list of assets acceptable as collateral in its money market operations.
Analysts said this would increase liquidity in the repo market and would not hurt government bonds.
"I don't think it is a surprise. They always wanted to have a large base for collateral," said Nathalie Fillet, senior analyst at BNP Paribas.
"I don't think it will impact the government bonds market. In fact it will make the repo market more liquid. People who were previously unable to access it will now be able to access it. It is probably positive for the mortgage backed securities and should not have any impact on government bonds."
ECB ON HOLD
Meanwhile, the European Central Bank announced a widely expected decision to keep interest rates on hold at 2.0 percent. The Bank of England, in contrast, lifted UK interest rates a quarter point to 4.75 percent in a widely anticipated move.
"The ECB rate outcome is a non-event for the market and we don't even have a press conference this month," said Audrey-Childe Freeman, senior economist at CIBC World Markets.
"It is a week where oil prices have dominated the headlines and now focus is turning to the (U.S.) non-farm payrolls report, so the market will trade on a quiet note ahead of those numbers."
The September Euribor <FEIU4> interest rate future was up 0.5 basis points at 97.860. Money markets price in about a 60 percent chance of a quarter point rate hike by year-end.
September Bund futures <FGBLU4> was up 18 ticks at 114.84, having hit a four-month high of 114.94 earlier.
Security concerns were never far from the market's mind and a top British navy officer was quoted as saying on Thursday that intelligence showed al Qaeda planned to target merchant shipping to disrupt world trade.
The news had no impact on the market, although earlier this week safe-haven bonds got a boost from a decision by U.S. authorities to issue a "high" level threat alert.
Bunds were steady against Treasuries, with the 10-year yield gap unchanged at 30 bps. The 10-year euro swap spread was steady at 11 bps.
- scherzo, hai ragione su tutto 