European Bond Yields Hold Near Lowest in Two Months as Stocks Decline

(Bloomberg) -- European bond yields held near the
lowest in two months as stock markets across the region fell and
corporate-debt risk surged to a record

Bunds reversed earlier losses on speculation investors
switched to the safety of government securities. Benchmark 10-
year yields rose earlier after data showing consumer-price
inflation accelerated in Germany in July, adding to the case for
the European Central Bank to keep raising interest rates.


Read more at Bloomberg Bonds News

European Bonds Rally, Pushing Benchmark Yield to Its Lowest in Two Months

(Bloomberg) -- European government bonds rallied,
pushing 10-year yields to the lowest in more than two months, as
stocks slumped and the risk of holding corporate debt soared.

Benchmark bunds rose for a third day on rising concern about
loan defaults and as investors balked at funding takeovers.
Traders also scaled back bets that the European Central Bank will
push interest rates higher as a report showed business confidence
in Germany weakened for a second month.


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ECB's Garganas Calls on Banks to Tighten Lending for Leveraged Buyouts

(Bloomberg) -- European Central Bank governing
council member Nicholas Garganas called on banks to tighten
lending to buyout firms, saying current pricing of loans may not
reflect risks.

``It is crucial that financial institutions properly price
the risks involved and that in some circumstances limit the
amount they lend,'' Garganas said yesterday in an interview in
his Athens office. Banks ``shouldn't be tempted to relax their
lending criteria to attract new business,'' Garganas said.


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Trichet Says European States Must Implement Agreement to Balance Budgets

(Bloomberg) -- European Central Bank President Jean-
Claude Trichet said a three-month old European Union balanced-
budget agreement ``must be implemented,'' dismissing French
President Nicolas Sarkozy's call to loosen deficit controls.

Trichet's comments in an interview today in Aix-en-Provence,
southern France, marked the second time in four days he has
indirectly criticized Sarkozy, who has proposed 11 billion euros
($15 billion) of tax cuts to spur economic growth. Sarkozy wants
defense spending excluded from deficit calculations for France,
Germany, Italy and the U.K.


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European Government Bonds Post Weekly Decline on Outlook for ECB Rates

(Bloomberg) -- European government bonds fell this
week, extending the worst quarterly slide in almost eight years,
after European Central Bank President Jean-Claude Trichet
signaled policy makers may need to lift interest rates further by
year-end.

Benchmark debt dropped today, sending 10-year bund yields to
near a five-year high, after a report showed manufacturing orders
in Germany rose more than expected in May. Bonds fell yesterday
after Trichet said inflation in the region needs ``careful
monitoring,'' as the ECB kept its key rate at 4 percent.


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TREASURIES-Bonds fall on lower European debt, ADP jobs data

(Reuters) - NEW YORK, July 5 - U.S. Treasury debt prices fell
on Thursday, following the lead of weaker euro zone debt and
after stronger-than-expected data on jobs gave a boost to
investor forecasts for Friday's non-farm payrolls report.




Euro zone debt fell on Thursday before an interest rate
decision by the European Central Bank, which, as expected left
rates on hold at 4 percent.


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European Government Bonds May Decline on View ECB Will Signal Higher Rates

(Bloomberg) -- European government bonds may fall on
speculation European Central Bank President Jean-Claude Trichet
will signal further interest-rate increases after policy makers
conclude their monthly meeting.

While all 42 economists surveyed by Bloomberg News forecast
the Frankfurt-based ECB will hold borrowing costs at 4 percent
today, futures trading shows investors are raising bets the key
rate will reach 4.5 percent by year-end. Yields on Europe's
benchmark bund have risen 10 basis points this week.


Read more at Bloomberg Bonds News

U.S. Treasuries Fall After European Bonds Decline on Interest Rate Concern

(Bloomberg) -- U.S. 10-year Treasury notes dropped
after Europe's government bonds slid for a second day yesterday
on speculation the European Central Bank will keep increasing
interest rates from a six-year high.

The yield on the benchmark 10-year note rose 2 basis points
to 5.06 percent as of 7:56 a.m. in Singapore, according to bond
broker Cantor Fitzgerald LP. The price of the 4 1/2 percent
security due in May 2017 fell 5/32, or $1.56 per $1,000 face
amount, to 95 21/32. A basis point is 0.01 percentage point.


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ECB May Keep Key Rate at 4 Percent, Wait Until September to Raise Again

(Bloomberg) -- The European Central Bank will
probably keep interest rates unchanged, preferring to wait for
confirmation that economic growth is fanning inflation before
raising borrowing costs again, a survey of economists shows.

Policy makers meeting in Frankfurt today will keep the
benchmark refinancing rate at 4 percent, according to all 42
economists in a Bloomberg News survey. The bank will raise the
rate to 4.25 percent in September, a separate survey shows.


Read more at Bloomberg Currencies News

Dollar Approaches All-Time Low Against the Euro on Interest-Rate Outlook

(Bloomberg) -- The dollar dropped to a 26-year low
versus the British pound and approached the weakest level against
the euro on speculation the Federal Reserve will keep borrowing
costs unchanged while other central banks extend their increases.

Investors sold the U.S. currency amid concern losses in the
subprime mortgage sector may weaken the housing market and spill
over into the broader economy, dimming the allure of U.S. assets.
The Bank of England is forecast to boost interest rates while the
European Central Bank may signal increases this week.


Read more at Bloomberg Currencies News

European Government Bonds May Decline Before Consumer Confidence Report

(Bloomberg) -- European government bonds may drop
before a report that's expected to show German consumer
confidence rose, adding to expectations the European Central Bank
will keep raising interest rates.

Benchmark 10-year bund yields held near the highest in
almost five year last week after surveys showed euro-region
manufacturing grew at an unexpectedly rapid pace in June and
Belgian business confidence rose more than forecast. GfK AG's
confidence index for July probably climbed to 7.8 from 7.3 in
June, according to economists surveyed by Bloomberg News.


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Platinum, Palladium Rise as Falling U.S. Dollar Boosts Investment Appeal

(Bloomberg) -- Platinum and palladium rose in New
York along with other precious metals as a decline in the U.S.
dollar boosted their appeal as alternative investments.

The dollar fell to a two-week low against the euro after
European Central Bank President Jean-Claude Trichet suggested he
may extend interest-rate increases. Platinum, mostly traded in
dollars, has risen 14 percent this year as the dollar dropped
1.5 percent against a basket of six major world currencies,
including the euro.


Read more at Bloomberg Commodities News

Yen Drops to Record Low Against Euro as Interest Rates Spur Carry Trade

(Bloomberg) -- The yen dropped to a record low
against the euro and fell to the lowest level in more than four
years versus the dollar as global investors borrowed the nation's
currency to buy higher-yielding assets elsewhere.

Japan's lowest interest rates among major economies also
spurred the country's investors to put on the so-called carry
trades, adding to yen selling. The euro rose to a two-week high
against the dollar after European Central Bank President Jean-
Claude Trichet suggested he may extend interest-rate increases.


Read more at Bloomberg Currencies 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 10-Year Bonds Drop for Second Day Before German Confidence Report

(Bloomberg) -- European bonds fell for a second day
before a report that's expected to show business optimism in the
region's largest economy is buoyant, underpinning the case for
the European Central Bank to keep lifting interest rates.

The drop in debt pushed 10-year yields to near a five-year
high as investors reassess the outlook for global borrowing
costs. An index tomorrow is likely to show German business
confidence held near the highest on record this month. Futures
show traders are adding to bets the ECB will raise rates twice
more this year.


Read more at Bloomberg Bonds News

Platinum Falls in London as Higher Rates May Slow Demand; Palladium Drops

(Bloomberg) -- Platinum fell for a fourth successive
day in London on speculation rising borrowing costs in Europe
will slow demand from car manufacturers. Palladium also dropped.

Europe was the biggest user of platinum last year, dominated
by demand from manufacturers of auto catalysts to reduce
pollution, according to London-based manufacturer Johnson Matthey
Plc. The European Central Bank, the Swiss National Bank and the
Bank of England have raised interest rates this year.


Read more at Bloomberg Commodities News