European Bonds Snap Three Weeks of Gains After ECB Indicates Higher Rates

(Bloomberg) -- European government bonds snapped
three weeks of gains after the European Central Bank indicated
it will raise interest rates further this year.

ECB President Jean-Claude Trichet signaled rates may rise
from a six-year high of 4 percent as early as September, saying
``strong vigilance'' is needed to guard against price pressures.
Policy makers used the phrase a month before each of the ECB's
eight rate increases since late 2005. Trichet spoke on Aug. 2
after the bank kept borrowing costs unchanged, as forecast.


Read more at Bloomberg Bonds News

European Bonds Advance as Subprime Woes Send Corporate Debt Risk Soaring

(Bloomberg) -- European government bonds gained for
a fifth day as the risk of owning corporate debt soared to the
highest in at least three years.

Bunds rose, pushing 10-year yields to the lowest in 2 1/2
months, after Germany's IKB Deutsche Industriebank AG reported
losses linked to loans made to U.S. homeowners with poor credit
histories. Government debt dropped earlier on speculation the
European Central Bank will this week reiterate its preference for
higher rates.


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UPDATE 2-Argentine stocks, bonds fall in dollar chase

(Reuters) - BUENOS AIRES, July 24 - An unusual drop in
Argentina's currency triggered a sell-off in both bonds and
stocks on Tuesday as investors liquidated assets and rushed to
buy dollars before the peso -- at its weakest level in more
than four years -- declined further.




With agricultural exports booming and flooding the country
with greenbacks, it's usually dollars chasing pesos in
Argentina and the Central Bank purchases dollars most days to
keep the local currency from appreciating.


Read more at Reuters.com Bonds News

European Bonds Fall on Speculation Global Growth to Prompt Rising Rates

(Bloomberg) -- European bonds fell on speculation
global economic growth is fast enough to prompt the European
Central Bank to increase interest rates this year.

ECB council member Nicholas Garganas said higher rates are
``warranted.'' Ten-year bunds snapped two-days of gains after
U.S. reports showed factory output rose the most since February
and prices paid to producers excluding food and fuel climbed
more than forecast. Federal Reserve Chairman Ben S. Bernanke may
reiterate tomorrow that the bank is seeking to curb inflation.


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European Bonds May Fall as Inflation Report Points to Interest-Rate Rise

(Bloomberg) -- European government bonds may decline
on speculation a report today will show inflation held near the
European Central Bank's target last month, boosting the case for
higher interest rates.

The European Union will probably say consumer prices in the
13-nation euro region increased 1.9 percent in June from a year
earlier, the same as in May, according to economists in a
Bloomberg survey. ECB policy makers last week said benchmark
borrowing costs remain supportive of economic growth.


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Chile stocks slip, peso hits 14-mo high eyeing rates

(Reuters) - The Chilean Central Bank is widely expected to raise its
benchmark lending rate on Thursday afternoon to 5.25 percent
from the current rate of 5 percent.




The anticipated move, which has strengthened the peso and
dampened the stock market, is seen as the most likely response
to rising inflation.


Read more at Reuters.com Bonds News

Dollar Little Changed Against Euro Before Bernanke Speaks on Inflation

(Bloomberg) -- The dollar was little changed against
the euro before Federal Reserve Chairman Ben S. Bernanke speaks
on inflation today.

The dollar gained versus Europe's single currency earlier on
speculation Bernanke will reiterate inflation remains the Fed's
``predominant'' concern. The dollar has traded near a record low
against the euro on views that the European Central Bank will
raise borrowing costs again, while the Fed stays on hold.


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Dollar near 26-year low vs sterling

(Reuters) - The Bank of England is widely expected to lift rates by 25 basis points to 5.75 percent after a two-day meeting that ends on Thursday, taking them further above the Federal Reserve's 5.25 percent rate.




Also on Thursday, the European Central Bank and its president, Jean-Claude Trichet, are seen reinforcing expectations for higher rates in the euro zone eventually, while keeping them on hold for now at 4.0 percent.


Read more at Reuters.com Hot Stocks News

Dollar Trades Near Record Low Against Euro Before Central Bank Meetings

(Bloomberg) -- The dollar traded near a record low
against the euro and the weakest in 26 years versus the British
pound on speculation central banks in Europe will raise interest
rates while the Federal Reserve remains on hold.

The U.S. dollar has declined against 14 of the 16 most-
active currencies this year as a housing slump prompted traders
to bet the Fed will hold, or lower, borrowing costs this year.
The Bank of England will probably raise rates tomorrow for a
third time this year and the European Central Bank may signal
plans to add to two increases this year to tame inflation.


Read more at Bloomberg Currencies News

Euro Falls on View Recent Gains Already Reflect Outlook for Interest Rates

(Bloomberg) -- The euro declined from a record
against the yen on speculation recent gains already reflect
expectations the European Central Bank will raise interest rates
this year.

The European currency rose to the highest level in two
months yesterday versus the dollar before the ECB's monthly rate-
setting meeting this week. Economists surveyed by Bloomberg News
forecast policy makers will hold borrowing costs at 4 percent
July 5. The euro's rally this year is putting European
manufacturers at a disadvantage, French President Nicolas Sarkozy
said yesterday.


Read more at Bloomberg Currencies News

Trichet's `Vigilance' Vow Gives Way to Less Visibility, More Volatility

(Bloomberg) -- In the annals of central-banker
buzzwords, ``strong vigilance'' is probably about to go the way
of ``measured pace.''

Investors and economists who've grown used to European
Central Bank President Jean-Claude Trichet's vow to be on
constant lookout for signs of faster inflation are likely to
find the term disappearing from his pronouncements.


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Sri Lanka's Central Bank May Keep Key Rate Unchanged for a Fourth Month

(Bloomberg) -- Sri Lanka's central bank will
probably keep its benchmark interest rate unchanged for a fourth
straight meeting to push inflation lower while supporting growth.

Central Bank of Sri Lanka Governor Nivard Cabraal will
leave the repurchase rate at 10.5 percent, the highest level in
Asia, according to 10 of 11 analysts surveyed by Bloomberg News.
One economist expected a 25 basis point increase. The decision
is expected on June 25 at 7.30 a.m. in Colombo.


Read more at Bloomberg Emerging Markets News

European Government Bonds Drop on Concern Global Inflation Is Quickening

(Bloomberg) -- European government bonds fell for a
second day as central banks in the U.K. and Sweden indicated they
will raise interest rates further, adding to concern global
inflation is quickening.

Debt's slide sent 10-year yields to near a five-year high as
investors reassess the outlook for global borrowing costs.
Interest-rate futures suggest the European Central Bank will keep
raising lending rates this year, while Sweden's Riksbank said
yesterday it'll lift rates twice more and minutes of the Bank of
England's last rate-setting meeting showed more policy makers
backed higher borrowing costs than forecast.


Read more at Bloomberg Bonds News

European Government Bonds Little Changed Before German Confidence Report

(Bloomberg) -- European government bonds were little
changed before a report that's expected to show investor
confidence in Germany, the region's largest economy, soared to
the highest in a year.

Ten-year yields held near the strongest since August 2002
yesterday as European Central Bank official Jose Manuel Gonzalez-
Paramo said monetary policy was still accommodative. Bonds may
extend losses before a June 22 report that's likely to show
German business sentiment stayed near a record high this month.


Read more at Bloomberg Bonds News

European Note Yields Hold Near Six-Year High on Outlook for Key ECB Rates

(Bloomberg) -- European two-year government note
yields held near the highest in more than six years on
speculation accelerating growth in the euro region economy will
prompt central bank officials to keep raising interest rates.

The drop in benchmark debt has also sent 10-year bund yields
to near their strongest since August 2002 as traders add to bets
the European Central Bank will lift borrowing costs twice more
this year. Bonds may extend losses before a report tomorrow
that's expected to show German investor confidence rose to the
highest in a year this month.


Read more at Bloomberg Bonds News

European Government Bonds May Fall on Speculation Inflation Is Quickening

(Bloomberg) -- European government bonds may fall
before a report likely to show inflation in the euro region held
near the European Central Bank's 2 percent limit last month,
fueling expectations of further interest-rate increases.

Benchmark 10-year bund yields touched the highest since
August 2002 yesterday after ECB policy maker Erkki Liikanen said
the outlook for growth in Europe will be ``positive'' for years.
Futures trading shows investors are raising bets the central bank
will lift rates twice more this year.


Read more at Bloomberg Bonds News

Gold Gains as Investors Bet Recent Fall Overdone; Silver Is Little Changed

(Bloomberg) -- The price of gold rose in Asia as
investors bet last week's decline, the largest fall in more than
three months, was overdone. Silver was little changed.

The spot gold price fell 3.4 percent last week, the biggest
weekly decline since March 2, after the Reserve Bank of New
Zealand and the European Central Bank raised rates. Holding gold
becomes less attractive when interest rates rise because the
metal has no fixed returns.


Read more at Bloomberg Commodities News

RPT-TREASURIES-Bonds tumble on fears over rising global rates

(Reuters) - NEW YORK, June 7 - U.S. Treasury debt prices
collapsed on Thursday as benchmark yields posted their largest
one-day spike in three years, spurred by fears of tighter
monetary policy worldwide.




The market plunge was initiated by an unlikely source, New
Zealand, whose central bank unexpectedly raised rates a day
after the European Central Bank hiked rates to curb inflation.


Read more at Reuters.com Bonds News

European Bonds Gain on Central Bank President's Interest Rate Remarks

(Bloomberg) -- European government bonds rose after
central bank President Jean-Claude Trichet failed to suggest
interest rates would need to rise beyond this year to rein in
inflation.

Yields on benchmark 10-year bunds, more sensitive to the
inflation outlook, fell from a three-year high after he said the
European Central Bank kept its inflation forecast for 2008
unchanged. Trichet left the door open for more interest-rate
increases this year after the ECB lifted its refinancing rate a
quarter-point to 4 percent.


Read more at Bloomberg Bonds News

Euro Weakens Against Dollar, Yen After Trichet's Comments on Rate Outlook

(Bloomberg) -- The euro weakened against the dollar
and yen as some traders pared bets on interest rate increases
this year by the European Central Bank after comments by
President Jean-Claude Trichet.

The ECB today raised its benchmark borrowing cost to a six-
year high of 4 percent, as predicted by all 52 economists
Bloomberg surveyed.


Read more at Bloomberg Currencies News