Yields and basis point (bp) movements of some of the most-watched 10-year bonds this afternoon:
US: 2.06% (6bp)
UK: 2.06% (4bp)
Germany: 1.54% (4bp)
France: 2.13% (no change)
Spain: 4.75% (-14bp)
Italy: 4.55% (-4bp)
[NOTE: there are 100bp to a percentage point]
Bond yields climbed by six basis points to 2.06% in the US as data from the United States Department of Labor's Bureau of Labor Statistics showed that total nonfarm payroll employment increased by 236,000 in February and the unemployment rate edged down to 7.7%. Employment increased in professional and business services, construction and health care. The number of long-term unemployed - those jobless for 27 weeks or more- was about unchanged at 4.8m in February. These individuals accounted for 40.2% of the unemployed.
In the UK, bond yields rose by four basis points to 2.06% as data from the Office of National Statistics showed that the non-seasonally adjusted volume of construction output decreased by 10.2% in the UK in January. New work decreased by 12.7% and repair and maintenance slid by 5.3%. The largest contributor to the decline in ouput was the private commercial sector which fell by 14.5%.
In Germany, bond yields also jumped by four basis points, to 1.54% after data published by the Bundesministerium fuer Wirtschaft und Technologie (Ministry for Economy and Technology) showed that industrial production growth was flat in January from the previous month. A growth rate of 0.4% had been expected. This contrasted to December, when industrial production rose by 0.6%. Within the industry as a whole, producers of intermediate goods and consumer goods expanded from their production by 0.6% and 1.6% respectively.
In France, bond yields were flat at 2.13% as the treasury announced that it would sell €2bn in 357-day bills on March 11th. Of this, some €1.80bn of 174-day bills and €4bn of 84-day bills were scheduled to be sold.
In Spain, bond yields contracted by 14 basis points to 4.75% as provisional data from the Instituto Nacional de Estadistic (the Institute of National Statistics) showed that the annual rate of growth for the Industrial Production Index stood at -3.6% in Janury, up from -8.6% in December 2012. All industrial sectors showed negative annual growth. Energy output growth fell by 3.9%. The institute said that this was due mainly to the negative performance of the production, transport and distribution power and extraction of hard coal.
In Italy, bond yields contracted by four basis points to 4.55% after credit ratings agency Standard & Poor's published a statement saying that credit markets appear unaffected by Italy's election results. Meanwhile, Italian markets had time to digest a speech delivered by Ignazio Visco, Governor of the Bank of Italy, who delivered a presentation entitled Economia e finanza dopo la crisi (Econmics and finance after the crisis). He said that the dramatic events of the last five years had highlighted the limitations of models and analysis of quantitative finance and economics. He said that analytical models "should be used with common sense, to provide a decision-making framework reference without forcing them into formulas [which are] too mechanical".