Yields and basis point (bp) movements of some of the most-watched 10-year bonds this afternoon:
US: 2.15% (1bp)
UK: 2.02% (-5bp)
Germany: 1.50% (-2bp)
France: 2.12% (-1bp)
Spain: 4.76% (-1bp)
Italy: 4.65% (5bp)
[NOTE: there are 100bp to a percentage point]
In the US, bond yields rose by one basis point to 2.15% as the results of a three-month and six-month T-bill auction were announced. The US sold $35bn of three-month bills at a high rate of 0.095% with a bid-to-cover ratio of 4.490 while €30bn of three-month bills were sold at a high-rate of 0.115% with a bid-to-cover ratio of 4.810.
In the UK, bond yields contracted by five basis points to 2.02%, as the latest Bank of Scotland PMI report showed that the health of the Scottish private sector economy continued to improve in February. Data pointed to solid growth in both business activity and inflows of new work which in turn contributed to further job creation north of the border. Costs pressures facing businesses rose, however, leading to a slight increase in average output prices over the month.
In Germany, bond yields fell by two basis points to 1.50%, as data published by the Destatis, the Federal Statistical Office, showed that turnover in manufacturing contracted by 0.3% in January 2013 compared to seasonally adjusted data on December 2012. Domestic turnover increased by 1%, the business with foreign customers declined by 1.8%, sales to euro area countries were 0.1% above preceding month's levels, while sales to other countries went down by 3%.
In France, bond yields slid by a single basis point to 2.12% as the country sold €7.792bn of T-bills. This comprised the sale of €3.999bn three-month T-bills, with a bid-to-cover ratio of 1.81, €1.789b of six-month T-bills with a bid-to-cover ratio of 2.61 and €1.995bn of 12-month T-bills with a bid-to-cover ratio of 2.24.
Meanwhile, data published by the National Institute of Statistics and Economic Studies (INSEE) showed that in January, French manufacturing output decreased by 1.4% while output decreased also in industry as a whole. Over the last three months, manufacturing output fell by 2.1% and was lower than its last year's level by 4.6%. Output fell dramatically in the manufacture of transport equipment by 6.9%.
In Spain, bond yields reduced by one basis point to 4.76%, as the country geared up to sell €5.5bn of treasury bills Tuesday March 12th.
In Italy, bond yields jumped by five basis points to 4.65% as data published by the Italian National Institute of Statistics showed that in the fourth quarter of 2012, the seasonally and calendar adjusted, chained volume measure of gross domestic product decreased by 0.9% with respect to the third quarter of 2012 and by 2.8% in comparison with the fourth quarter of 2011.