30-year U.S. Treasury bonds rise as ECB says yield cap not discussed

‘Absolutely Misleading’

A spokesman for the European bank said in an e-mail it’s “absolutely misleading to report on decisions” that haven’t been made and individual views that haven’t been discussed by the ECB’s Governing Council.

“As far as recent statements by government officials are concerned, it is also wrong to speculate on the shape of future ECB interventions,” the spokesman said. “Monetary policy is independent and undertaken strictly within the ECB mandate.”

Germany’s Bundesbank stepped up its criticism of the ECB’s plan to embark on potentially “unlimited” government bond buying. The purchases “entail significant stability risks,” the Frankfurt-based central bank said in its monthly report.

Demand for safety also declined earlier before U.S. reports this week that may show the recovery of the world’s biggest economy is gaining momentum.

Existing home sales rose 3.2 percent in July from June, when they dropped 5.4 percent, according to a Bloomberg survey before the National Association of Realtors’ report on Aug. 22. Sales of new homes, due the next day from the Commerce Department, rose 4.3 percent in July, a separate survey showed. Orders for durable goods increased 2.5 percent in July, another survey said Commerce Department data on Aug. 24 will show.

Rate Bets

The odds the Fed will take steps to support the economy at its Sept. 12-13 meeting are falling, according to Morgan Stanley and Credit Suisse Group AG.

The chance of any Fed action next month has fallen to 30 percent from 40 percent, according to an Aug. 17 report by Matthew Hornbach, head of U.S. interest-rate strategy at Morgan Stanley in New York, a primary dealer. If policy makers do anything, it will be to extend their outlook for the Fed’s main interest rate to 2015 from 2014, Hornbach wrote.

The probability of another large-scale asset-purchase program is 50 percent at most, Neal Soss and Dana Saporta, economists at the primary dealer Credit Suisse Group AG, wrote in a note yesterday.

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