Cashflow away from bonds, into stocks

Hordes of investors looking to buy gold will be watching closely as US treasuries today fell to make way for new stock investments, changing the overall market outlook.

Bonds boomed last week as safe-haven buying came into play amid market uncertainty, with two-year Treasury bonds gaining 7.1 basis points to a yield of 5.25 percent and ten-year issues themselves increasing by eight basis points.

Today, however, cash was sucked from bonds and into buoyant stocks, with the Dow Jones and other indexes registering positive stock index futures, triggering the sale of many bonds by those who had bought them to hedge against equity market uncertainty.

Albert Safdie, global fixed income trader at Hapoalim Securities in New York, told Reuters: "Stocks are delivering earnings. You've seen what happened with Apple.

"There is a small portion of companies that are falling short but in general stocks are in good shape," he continued, signaling the move away from bonds and into riskier stock investment.

Gold bullion investors will be holding their breath in anticipation of new US goods and labour figures soon to be released – an upturn in risky stock investments could prove premature if fears about the impact of sub-prime bring safe-haven buying back onto centre stage.