Investors view boosted bonds

Investors looked past a statement showing consumer prices rose in July and expect that price rises will simplify in future boosted bonds and bond prices rose in this week.

There was an increase of 8/32 to 100 25/32 in 10 year signpost bond while yield drop down from 4 percent to 3.9 percent o late Wednesday where 30 year bond rose 23/32 to 99 21/32 with falling yield of 4.50 percent from 4.56percent. Likewise these bonds 2-year note was up 7/32 to 100 17/32 with a yield of 2.75percent. Bond prices and its yield traveled in contradictory directions.

Annual inflation rate touched its uppermost point in 17 years as it soared on 5.6 percent in July which was at 5 percent before a month according to The Labor Department’s Consumer Price Index statement. Cost of energy had the greatest factor causing this rise that climbed 4% on a monthly basis and 29.3% annually.

According to a portfolio manager at Cabot Money Management in Boston Wednesday report does not affected the bond market as it is a lagging pointer. In general price inflation munches into the value of fixed income investments and inflation indications drive bond prices inferior. Labor market improvement report given by government show that now inflation is not going to harm in future and will not be the matter of concern for long in future.