Tuesday 23 April 2013

European bonds rise with consumer confidence, US growth slows

Europe's financial and economic problems showed further signs of easing on Monday.

Italy’s government bonds rose, pushing the two-year yield down 10 basis points to a record low of 1.24 percent, after Giorgio Napolitano was re-elected as president over the weekend.

Spanish bonds also rose on Monday, the 10-year yield falling 12 basis points to 4.50 percent, the lowest since November 2010, even as a report from Eurostat showed that the country's budget deficit widened to 10.6 percent of gross domestic product last year.

Another report on Monday showed that consumer confidence in the euro area rose to -22.3 in April from -23.5 in March.

In the US, though, the Chicago Fed's National Activity Index fell to -0.23 in March from +0.76 in February. The three-month average fell to -0.01 from +0.12.

According to the Chicago Fed, the three-month average showed that economic growth “was very near its historical trend” and that inflationary pressure is “subdued”.

Another report from the US on Monday showed that existing home sales fell 0.6 percent in March. The fall was mostly attributed to a decline in the availability of distressed homes though.

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