Taiwan Bonds Rise as U.S. Retail Sales Gain Less Than Expected

Taiwan’s bonds rallied as worse- than-expected U.S. retail sales figures prompted investors to favor the safest assets. The local dollar was steady.

Benchmark 10-year yields dropped to the lowest level in almost two months after new notes of that maturity started trading yesterday. Sales at U.S. retailers increased 0.4 percent in January from a year earlier, less than the 0.8 percent gain forecast by economists in a Bloomberg survey.

“Yields have gone lower on the bad U.S. retail sales figure,” said James Wang, a fixed-income trader at Yuanta Securities Co. in Taipei. “Yields on the new 10-year bonds have dropped quite a lot as new issuances usually have better liquidity, hence higher demand.”

The yield on the government’s 1.25 percent notes due March 2022 fell one basis point, or 0.01 percentage point, to 1.258 percent as of 9:51 a.m. in Taipei, prices from Gretai Securities Market show. That’s the lowest level for benchmark 10-year notes since Dec. 19.

The Taiwan dollar was little changed at NT$29.587 against its U.S. counterpart, according to Taipei Forex Inc. It touched NT$29.370 on Feb. 10, the strongest level since Sept. 13.

The overnight money-market rate, which measures interbank funding availability, fell one basis point to 0.392 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.

To contact the reporter on this story: Andrea Wong in Taipei at awong268@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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