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Irish govt bonds jump

after overseas rallies

DUBLIN: Irish government bonds jumped as the Irish pound leapt over three pfennings on a strong dollar after an Irish market holiday on Monday and following strong rallies in British and US bonds, dealers said.

"The US and UK markets rallied yesterday basically because of a strong dollar. That has given a firm undertone to all peripheral markets," one trader said.

BY 0925 GMT, the eight percent bond due 2000 jumped 35 pence to 99.70, yielding 7.92 percent, while the eight percent stock dated 2006 added 45 pence to 97.65, to yield 8.17 percent. The 10-year yield premium over UK gilts narrowed to 17 b.p from 12.

The Irish pound was trading at 2.3129 marks from 2.2757 at Friday's close, buoyed by further dollar strength, as the US unit was strongly supported above 91 yen and firmed to over 1.41 marks before drifting and pausing for breath.

The main focus for the week will be on US quarterly refunding operations, which will begin today with a $18 billion three-year note auction at 1745 GMT, followed by a $13 billion 10-year note auction tomorrow and Thursday's $11.5 billion 30-year note auction.

The large amount of supply will be the acid test of Japanese investors' intentions after deregulation moves, dealers said.

US data this week will include wholesale trade data for June at 1400 GMT today, Wednesday's Federal Beige Book report on US economic conditions, producer price figures for July on Thursday and consumer price statistics for July on Friday.

Recent US inflation numbers have been relatively stable and dealers said no shocks are expected.

Out of the UK, there will be a Confederation of British Industry distributive trades survey for July on Friday.

The first Bundesbank council meeting after the summer aecess will be anxiously awaited by investors on Thursday.-Reuter