Treasuries nudged higher and yields edged lower on Wednesday as traders talked about the official start of the summer doldrums and predicted more range-bound trading ahead of next week’s Federal Reserve meeting.

Fed officials are observing the usual speech “blackout” before the meeting, depriving the market of a source of news, while data have tailed off towards the end of the month.

It has left active investors looking to equities and commodities for direction.

Analysts at said the market was suffering “low-volume, low-enthusiasm trade, with players scratching around for something to grab on to”.

By late afternoon in New York, yields on 10-year notes were off 0.4 basis points at 5.153 per cent.

Two-year notes were unchanged at 5.203 per cent, hovering around the five-plus-year highs reached the previous day.

There was more direction in Europe, where eurozone government bonds were weaker after Jean-Claude Trichet, governor of the European Central Bank, signalled in a speech to a European parliamentary committee that rates would rise further to fight inflation.

The remarks followed strong consumer spending data from France, which showed that purchases of household goods had risen at their fastest pace in more than 20 years.

The yield on the two-year Schatz rose 1.4 basis points to 3.470 per cent, while that on the 10-year bund was 1.1bp higher at 4.008 per cent.

In the UK, gilts rallied after the minutes of the Bank of England’s June meeting showed that only one member had voted for an increase in rates. There had been fears that two members could have voted for a rise following some strong recent economic data.

The rally was limited, however, as rate rise talk lingered after Tuesday’s stronger-than-expected data on the UK housing market.

The yield on the two-year gilt slipped 1.9bp to 4.817 per cent, while the yield on the 10-year was 0.1bp lower at 4.718 per cent.

Japanese government bonds rose on bargain-hunting following Tuesday’s fall. But most analysts believe yields are in an upward trend following recent hawkish comments from the Bank of Japan.

Goldman Sachs said it had brought forward its prediction of the end of the bank’s zero interest rate policy from August to July.

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