Bonds retreat as banks rally on Citigroup results

LONDON (ShareCast) - Treasuries fell back across European and US markets as US banking giant Citigroup (ASFZ.PK - news) gave the whole sector a lift by reporting second quarter losses that were nowhere near as bad as feared.

A report in the Financial Times said that the UK Treasury was planning reforms that would facilitate increased government borrowing also contributed to UK gilts' downward movement.

The yield on 10-year UK gilt rose by 14 basis points to 5.05%.

In Europe, speculation the European Central Bank is pondering raising rates to fend off inflation added to downward pressure on bonds.

The yield on Germany's benchmark 10-year bund rose by 13 basis points to 4.58%.

In the US, the yield on a ten-year treasury climbed by nine basis points to 4.08%.

Source: http://uk.biz.yahoo.com/080718/214/i3f5n.html