Reply #36: Bonds rise as investors seek safe havens

[Ghost Dog]

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=38939.3177083333-880250066&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

Government bonds advanced on Thursday as investors bought safe-haven assets after the UK was put on its highest state of terrorism alert. <snip> Equity markets stumbled, and bond markets rose as a result. In late morning trade, the yield on the two-year gilt fell 2.8 basis points to 4.903 per cent and the yield on the 10-year gilt lost 2bp to 4.660 per cent. Meanwhile, in the eurozone market, the yield on the two-year Schatz was down 2.8bp to 3.527 per cent while the 10-year Bund yield was 2.5bp lower at 3.905 per cent. The security alert overshadowed other market news. The European Central Bank released its monthly bulletin, raising its forecasts for inflation and growth in 2006. Though it also signalled that interest rates were likely to move higher, it was little surprise to a market that has already been pricing in further monetary tightening.

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Note inverted Brit (not Euro) yield-curve...