960402

Dutch bonds close higher

AMSTERDAM: Dutch bonds continued their push for higher ground on Tuesday, as the recently skittish market found a degree of stability.

"It's performed pretty well and there's been some international interest," one dealer said. "After a few months of bearish sentiment things look like they're stabilising a bit."

Dealers said the market had growing hopes of a German interest rate cut.

"The Bundesbank couldn't cut rates at its last meeting because the (bund) market was so unstable...but if the market goes on like this we'll definitely see a cut," one dealer said.

Dealers said the market was also looking to U.S. March payrolls data, due at 1330 GMT on Friday. After February's surprise 705,000 increase in jobs, markets are seeking reassurance of more subdued data.

According to a Reuter poll, analysts expect March payrolls to rise by 60,000. The impact of the data will be limited since the guilder market will be closed on Friday and Monday for the Easter break.

Dealers reported some interest in the long end of the curve on Tuesday and in the ten-year area. They expected 10-year yields to fall to at least 6.25 percent in the near term from their current 6.33 percent.-Reuter