Fixed IncomeStay updated with Business News, Pakistan news, Current world news and latest world news with Business Recorder.., 29 May 2015 00:06:02 +0000SRA Framework 2.0en-gbTen-year gilt yields hit 20-day low after soft GDP data British government bonds rallied strongly on Thursday, taking 10-year yields to their lowest in nearly three weeks, following the release of first-quarter gross domestic product data which undershot economists' expectations.

The Office for National Statistics confirmed an earlier reading of 0.3 percent growth in the first quarter -- half the fourth quarter rate -- wrong-footing economists who had been forecasting a small upward revision.

Ten-year gilt yields hit 1.814 percent at 1053 GMT, their lowest since May 8 and more than 7 basis points down on the day. The gilts outperformed their German counterpart , narrowing their spread over German debt by around 4 basis points to 129.2 basis points.

Copyright Reuters, 2015

]]> (Imaduddin)EuropeThu, 28 May 2015 12:21:20 +0000
Abu Dhabi Islamic Bank may expand Tier 1 sukuk issue by $2-3bn$2-3bn.html$2-3bn.htmlimageDUBAI: Abu Dhabi Islamic Bank will ask shareholders for permission to expand its existing Tier 1 sukuk issue, originally sold in 2012, by $2 billion to $3 billion, it said in a bourse filing on Thursday.

The increase is subject to regulatory approval, the Abu Dhabi lender said.

The Abu Dhabi lender will also ask shareholders to vote to increase the bank's capital by 168 million dirhams ($45.74 million) through a rights issue.

Copyright Reuters, 2015

]]> (Parvez Jabri)Middle East & AfricaThu, 28 May 2015 05:51:22 +0000
Long-dated yields dip on month-end buying, Greece fears YORK: Long-dated US Treasury yields edged lower on Wednesday on month-end buying and lingering concerns over Greece, while shorter-dated yields were mostly stable after the fears over Greece offset new supply.

The dip in 30-year Treasury yields marked their second straight daily decline and pushed the yields to their lowest in 2-1/2 weeks, at 2.87 percent. Demand was partly driven by investors purchasing bonds to readjust portfolios ahead of month-end.

Analysts have said that a decrease in new corporate supply this week has also helped prices on 30-year Treasury bonds, which move inversely to yields.

"We've found some stability in the long-end, with month-end buying and less investment-grade supply," said Justin Lederer, Treasury strategist at Cantor Fitzgerald in New York.

Concerns over Greece also spurred some demand for safe-haven Treasuries. While a government official said Wednesday that Greece and its creditors were starting to draft a technical-level agreement that will include no more wage or pension cuts, German Finance Minister Wolfgang Schaeuble said there was not much progress in the Greek debt talks.

The Schaeuble comments brought traders "back to reality," said Sean Murphy, a Treasuries trader at Societe Generale in New York. "There's a still a lot to play out with the Greece situation," he added.

Greece has to repay the International Monetary Fund 300 million euros on June 5, the first of four installments due in June that total 1.6 billion euros.

Yields on shorter-dated notes were little changed, with the fears over Greece leading some investors to seek Treasury debt with a maturity of less than 30 years, while new supply capped demand. Investors typically sell US government debt to make room for new supply.

The US Treasury Department sold $35 billion of five-year notes to solid investor demand at a yield of 1.560 percent, up from 1.380 percent at the prior auction in April and the highest since December.

Traders looked ahead to Thursday's release of weekly US jobless claims data and Friday's preliminary first-quarter US gross domestic product data.

Benchmark 10-year US Treasury notes were last mostly flat in price to yield 2.13 percent, from a yield of 2.14 percent late on Tuesday. US five-year notes were last down 1/32 to yield 1.53 percent, from a yield of 1.52 percent late on Tuesday.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)AmericasWed, 27 May 2015 21:00:53 +0000
Short-dated yields up on Fed rate hike bets; 30-yr yields slip;-30-yr-yields-slip.html;-30-yr-yields-slip.htmlimageNEW YORK: Short-dated US Treasury yields hit two-week highs on Tuesday on continued expectations that the Federal Reserve would hike rates this year, while yields on longer-dated Treasuries slid on concerns over Greece and global economic growth.

US two- and three-year yields, which are sensitive to expectations on when the Fed will hike rates, hit two-week highs of 0.65 percent and 1.03 percent, respectively, after traders took a sanguine view of US durable goods orders data.

Commerce Department data showed US durable goods order slipped 0.5 percent in April, in line with economists' expectations according to a Reuters poll, but were revised higher to 5.1 percent for March.

In addition, US business investment spending plans increased solidly for a second straight month, the data showed. "I viewed it as a fairly economy-friendly report," said Justin Hoogendoorn, fixed income strategist at BMO Capital Markets in Chicago. He said the data gave the Fed more room to be less accommodative.

After hitting two-week highs, yields on short-dated notes stabilized a bit, which Hoogendoorn attributed to expectations that the pace of Fed rate increases will be gradual.

"People just don't think the strength in the economy is there to sell off hard, the Fed's going to have to be extremely slow and gradual," Hoogendoorn said.

He said concerns over the impact of a stronger US dollar on the US economy and global economic weakness were boosting prices of 30-year Treasuries, whose yields held near eight-day lows touched early in the session.

Bond prices move inversely to yields. Worries over a possible Greek debt default also contributed to the price gains in 30-year Treasuries.

Greece has to repay the International Monetary Fund 300 million euros on June 5, the first of four installments due in June that total 1.6 billion euros.

"They're coming up on the June deadline," said Jonathan Rick, interest rate derivatives strategist at Credit Agricole in New York.

Two-year Treasury notes were last down slightly in price to yield 0.64 percent, from a yield of 0.63 percent late on Friday.

Benchmark 10-year Treasury notes were last up 12/32 in price to yield 2.18 percent, from a yield of 2.23 percent late on Friday.

US 30-year Treasury prices were last up 1-3/32 to yield 2.94 percent, from a yield of 3 percent late on Friday and near the eight-day low of 2.938 percent touched earlier.

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]]> (Shoaib-ur-Rehman Siddiqui)AmericasTue, 26 May 2015 20:53:22 +0000
German bond yields on track for first weekly fall in five weeks German bond yields headed for their first weekly fall in five weeks on Friday as the market focused again on central banks' continued use of heavy stimulus, which is helping to bring stability after weeks of violent price swings.

The first fall in German business morale in seven months, albeit a shallower dip than forecast, supported demand for government bonds. Greece was the exception in the European bond market, as its yields rose after the latest talks with creditors failed to deliver any solution to its debt crisis.

But German 10-year yields, the benchmark for euro zone borrowing costs, led other euro zone bond yields down, steadying after a dramatic sell-off that has driven up Bund yields some 55 basis points from a record low of 0.05 percent in mid-April.

European Central Bank policymakers helped halt that sell-off earlier in the week, with Executive Board member Benoit Coeure saying the bank would accelerate its bond buying in the next six weeks, anticipating a decline in liquidity over the summer.

German 10-year yields were 3 basis points lower on the day at 0.60 percent, with French and other top-rated European bond yields down a similar amount. Italian and Spanish equivalents were steady to a touch lower on the day.

"We see some weaker data that may give a little bit of support to the ongoing QE and (the view) that there's still room left for more expansionary policy," said DZ Bank strategist Christian Lenk.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)EuropeFri, 22 May 2015 16:31:30 +0000
US bond yields fall as data renew economic concerns YORK: US Treasuries yields declined on Thursday as a batch of disappointing economic reports revived worries about the US economy and prompted further questions whether the Federal Reserve will raise interest rates later this year.

An exit of bearish bond bets in advance of a government report on consumer prices in April and an economic speech from Fed Chair Janet Yellen on Friday further pushed a drop in yields, with the 30-year falling below 3 percent, analysts said.

Weaker-than-expected data on existing home sales, the manufacturing sector and US Mid-Atlantic business activity came a day after the central bank signaled a June rate hike is doubtful following an anemic first-quarter.

"There were fears about a sharp spring recovery, but the data haven't rebounded smartly," said Robert Tipp, chief investment strategist at Prudential Fixed Income in Newark, New Jersey.

Fed policy-makers at their April 28-29 meeting said they would like to see further economic improvement to decide on ending their near-zero interest rate policy stand, according to minutes released on Wednesday.

While most Wall Street economists forecast the Fed will raise rates by year-end, many of them said the Fed may postpone such a move until 2016 if more weak data surface.

Treasuries yields also declined on an emergence of month-end portfolio buying tied to an expected adjustment of a widely followed Treasuries market index that includes more longer-dated issues, analysts said.

On light trading volume, benchmark 10-year Treasuries were up 17/32 in price with a yield of 2.188 percent, down 6 basis points from Wednesday.

The 30-year bond was up 1-14/32 in price, yielding 2.976 percent, down 7.5 basis points.

Selling pressure on Treasuries from the domestic corporate bond sector also eased heading into a three-day US holiday weekend.

The US bond market will close at 2 p.m. (1800 GMT) on Friday, and stay shut on Monday for the US Memorial Day holiday.

More than $42 billion worth of investment-grade corporate bonds have been sold so far this week, putting May on pace as a record month for issuance, according to IFR, a unit of Thomson Reuters.

Less corporate supply likely bolstered interest in the $13 billion auction of 10-year Treasury Inflation Protected Securities (TIPS), analysts said.

Prior to the end of Friday's shortened session, traders will await for a likely muted April reading on the consumer price index, which economists forecast likely rose 0.1 percent.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)AmericasThu, 21 May 2015 19:33:52 +0000
Euro bond yields rise as supply glut tests fragile market Euro zone bond yields rose on Thursday as investors shaken by the market's recent selloff struggled to absorb more than 15 billion euros of new bonds from France and Spain.

Before the debt sales, yields were falling after Federal Reserve minutes showed late on Wednesday the U.S. central bank was in no hurry to raise interest rates. Focus then shifted to the European Central Bank's plan to accelerate asset purchases in May and June.

France sold almost 10 billion euros of fixed-rated and inflation-linked bonds while Spain auctioned 5.5 billion euros of short- and medium-term.

"The sell-off that we had means that some investors are very cautious of buying on dips, and that means, technically speaking, that they set a tighter stop than they normally would," said Mizuho strategist Peter Chatwell.

"Investors try not to take on as much risk and that means that the market acts in a more volatile manner."

German 10-year yields, the benchmark for euro zone borrowing costs, were up 3 basis points at 0.65 percent from the day's low of 0.60 percent. French and other top-rated euro zone bond yields were up a similar amount.

Spanish and Italian yields were 2 bps higher at 1.83 percent and 1.88 percent, respectively.

Preliminary surveys showing a recovery in French business activity in May also undermined demand for top-rated bonds, although the private sector in Germany -- the euro zone's biggest economy -- grew less than expected.

Data also showed that manufacturing activity in China and Japan remained sluggish in May, though lack of inflationary pressure suggested the authorities in Asia's top two economies could inject more stimulus if necessary.

Many analysts expect the market to remain jittery for the rest of the month. But they ruled out the kind of spike in yields seen recently, which has led some banks to raise their forecasts for German 10-year yields.

Increased coupon payments and bond redemptions in the coming month and the ECB's plans to ramp up asset purchases in May and June to offset thin liquidity this summer were expected to push yields lower.

"Next week, supply will be lighter and in June net supply will be negative, so conditions will be more supportive for the market," BNP Paribas strategist Patrick Jacq said.

"I see yields dragged down from these levels. The 10-year Bund yields could decline substantially but I don't expect a return back close to zero percent," he added.

Copyright Reuters, 2015

]]> (Imaduddin)EuropeThu, 21 May 2015 12:06:27 +0000
US bonds rise as Fed minutes hint June rate hike unlikely YORK: US Treasuries prices rose on Wednesday as the minutes from Federal Reserve's April policy meeting reinforced the view the central bank will likely leave interest rates near zero in June due to lingering concerns about the US economy.

Longer-dated bonds erased earlier losses that had been caused by worries that the Fed was possibly more determined to raise interest rates in June than previously thought.

"Many participants, however, thought it unlikely that the data available in June would provide sufficient confirmation that the conditions for raising (interest rates) had been satisfied," the minutes of the Federal Open Market Committee's April 28-29 meeting showed.

Worries about an imminent rate increase had emerged even though a spate of US data signaled a meek rebound following a likely economic contraction in the first quarter.

Although a June rate hike now seems unlikely, the minutes did not dispel expectations for such a move later this year, capping the rise in Treasuries prices.

Most top Wall Street firms forecast the Fed to begin raising rates by December.

"They reserved the right to stand pat in the second quarter until they see further development," said Mike Lorizio, head of Treasuries trading at John Hancock Asset Management in Boston.

Treasuries prices also improved due to a tapering in corporate bond supply. Companies had raised $38 billion in the bond market on Monday and Tuesday, according to IFR, a Thomson Reuters unit.

On light trading volume, benchmark 10-year Treasuries were up 3/32 in price with a yield of 2.251 percent, down 1 basis point from late on Tuesday.

The 30-year bond was down 8/32 in price after falling almost 1 point earlier. The 30-year yield was last 3.052 percent, up 1 basis point on the day but still below the 5-1/2 month peak of 3.128 percent seen last week.

Prices of US government debt, which fell during the past two sessions, had risen earlier on Wednesday in step with the European bond market, spurred by the European Central Bank's plan to accelerate its bond purchases in May and June, traders said.

Concerns about Greece's ability to make a June 5 debt payment to the International Monetary Fund had briefly renewed safe-haven demand for Treasuries.

Traders also pinned hopes for a further fall in yields from month-end portfolio buying tied to an expected adjustment of a widely-followed Treasuries market index that includes more longer-dated issues.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)AmericasWed, 20 May 2015 20:55:30 +0000
China completes sale of 14bn of yuan bonds in Hong Kong KONG: China sold 14 billion yuan ($2.26 billion) of yuan-denominated offshore bonds in Hong Kong on Wednesday, the seventh consecutive year the Ministry of Finance (MOF) has tapped the market to bolster its development.

Bonds of various tenors were offered, among which the largest amount sold was 5 billion yuan of three-year bonds at 2.8 percent, two sources familiar with the sale told Reuters.

The MOF will auction a total of 28 billion yuan bonds this year, the same as last year's size. The second tranche will be issued in the second half.

The first batch of sales on Wednesday were made to institutional investors, foreign central banks and regional monetary authorities.

Copyright Reuters, 2015

]]> (Parvez Jabri)AsiaWed, 20 May 2015 06:42:37 +0000
JGBs ease on US Treasuries, 5 years bond auction Japanese government bond prices dropped on Tuesday, taking cues from falls in US bonds and briefly extending losses after an auction of five-year JGBs showed limited demand at the current levels.

The 10-year JGB futures price fell 0.11 point to 147.29 while the yield on the current 10-year cash JGB yield rose 1.5 basis point to 0.390 percent.

US Treasuries prices fell on Monday on profit-taking after gains last week on weak US data, with many investors still nervous about spikes in volatilities in major bond markets around the world.

The auction of 2.5 trillion yen ($20.8 billion) five-year JGBs drew tepid demand, with bid-to-cover ratio coming at 2.80, the lowest level in three and a half years.

The results showed few real-money investors are eager to buy the paper below the yield of 0.10 percent as banks can earn the same rate of interest by parking funds at their accounts in the Bank of Japan.

The 20-year yield rose 3.5 basis points to 1.170 percent while the 30-year JGB yield rose 2.5 basis points to 1.420 percent.

Copyright Reuters, 2015

]]> (Parvez Jabri)AsiaTue, 19 May 2015 05:48:58 +0000