A batch of benign US economic data sent gilts to a new two-month high on the increased conviction that the US Federal Reserve has finished raising interest rates.
The centrepiece of the session was provided by the afternoon release of monthly US non-farm payroll numbers, which, by showing a 128,000 increase last month, proved to be in line with forecasts. Further support came from signs of a cooling of the US housing market and a tame survey from purchasing managers in the US manufacturing sector.
The September gilt future gained 10p at £110.48. Treasury 4¼ per cent 2011 put on 9p at £98.26, with Treasury 6 per cent 2028 up 67p at £124.98.
With corporate issuance subdued, bond investors looked ahead to next week’s roadshow from Germany’s Siemens, which is selling €1.5 billion of euro and sterling denominated hybrid bonds. United Business Media and Société Air France are also due to hold roadshows.