Yields and basis point (bp) movements of some of the most-watched 10-year bonds this afternoon:
US: 1.95% (-4bp)
UK: 1.89% (-5bp)
Germany: 1.40% (-6bp)
France: 2.03% (-4bp)
Spain: 4.99% (6bp)
Italy: 4.65% (4bp)
[NOTE: there are 100bp to a percentage point]
US bond yields contracted by four basis points to 1.95% as data published by the National Association of Home Builders and Wells Fargo Housing Market Index showed that builder confidence slipped two notches in March. The latest statistics showed that builder confidence in the market for newly built, single-family homes paused for a third consecutive month in March, with a two point reduction to 44. NAHB Chairman Rick Judson said: "Although many of our members are reporting increased demand for new homes in their markets, their enthusiasm is being tempered by frustrating bottlenecks in the supply chain for developed lots along with rising costs for building materials and labor [sic]."
In the UK, bond yields slid by five basis points to 1.89% as the onset of the spring saw the highest ever new seller asking prices in the month of March, according to data published by the Right Move house Price Index. The Index showed that momentum was continuing to build in the housing market with several key indicators setting new post credit-crunch milestones. The index showed that the average property asking price was £239,710 in March compared to £235,741 in February and the monthly index reading was recorded at 195 compared to 191.8 in February.
In Germany, bond yields dropped by six basis points to 1.40% as newly released data from Destatis Statistisches Bundesamt (the Federal Statistics Office) indicated that fewer businesses were being set up in the Eurozone's largest economy. The latest data showed that 7% less large companies were founded in 2012 compared to in the previous year and the number of small businesses established during the year contracted by 17% to 234,000.
In France, bond yields fell by four basis points to 2.03% after the country sold €3.998bn three-month T-bills with a bid-to-cover ratio of 1.88, €1.994bn six-month T-bills with a bid-to-cover ratio of 2.94 and €1.596bn 12-month T-bills with a bid-to-cover ratio of 3.16.
French Finance Minister Pierre Moscovici was quoted by French language news agency BFMTV as as being in favour of better protection for small savers in Cyprus. The news website cited him saying: "If Cyprus chooses, while respecting the overall contribution of the plan, a different distribution to better protect small deposits must listen and hear my mind."
Meanwhile, French markets were looking ahead to the potential outcome of a meeting scheduled between French President Francois Hollande and German Chancellor Angela Merkel this evening to discuss industrial partnerships.
In Spain, bond yields expanded by six basis points to 4.99% as the country geared up to sell €4.0bn of three and nine-month treasury bills on March 19th.
Spanish language website La Vanguardia cited the Minister of Economy of Catalonia, Andreu Mas-Colell, as reassuring Catalan savers saying that "there should be no contagion effect [as a result of] the rescue of Cyprus".
In Italy, bond yields rose by four basis point to 4.65% as the Ministry of Economy and Finance (MEF) announced the next issue of BTP Italia, the Italian government security which is indexed to the Italian inflation rate. The new issuance is slated from April 15th until April 18th unless there is early closing. BTP Italia was issued for the first time on March 19th and has reached a volume of €27bn over three issuances.