The following were the yield and basis point (bp) movements of some of the most-watched 10-year bonds this afternoon:
US: 2.60% (-5bp)
UK: 2.69% (-2bp)
Germany: 1.64% (-2bp)
France: 2.21% (-1bp)
Spain: 3.75% (+1bp)
Italy: 3.78% (+0bp)
Japan: 0.62% (-1bp)
Portugal: 5.02% (+0bp)
Greece: 8.36% (-25bp)
Bond yields were generally lower after the release of a weaker-than-forecast reading on the US manufacturing sector - courtesy of the ISM institute - and ahead of a raft of important economic data releases and central bank meetings which were scheduled for throughout the remainder of the week.
The ISM institute referenced various comments from the panel citing adverse weather conditions as a factor negatively impacting their businesses as one reason for the decline. Although some economists were in moderate disagreement as to just how large a role it had played a similar report from survey compiler Markit, earlier in the day, barely showed a decline in activity levels within the sector.
Over on the other side of the Atlantic, meanwhile, in the Eurozone, the latest reading on the area´s manufacturing sector came in slightly ahead of forecasts. Markit´s Purchasing Managers´Index for January rose to a reading of 54 from 53.9 in December (consensus: 53.9).
To take into account, figures for Greece revealed the first positive reading for the sector since August 2009.
Acting as a backdrop, economists continued to issue their forecasts for what to expect from the European Central Bank (ECB) come Thursday´s meeting of its Governing Council. For the most part they seemed fairly evenly split on whether the ECB would act now or wait until March.
For its part, last Friday Morgan Stanley issued a note to clients telling them that they do see the ECB cutting its main policy tool - the refinancing rate - further this quarter. However, they saw the 15 basis point reduction arriving in March, not February.
They further wrote that: "At this stage, we do not expect any additional liquidity measures, such as a VLTRO, to be announced. The Q&A is likely to focus also on the possibility of loan purchases that Mario Draghi alluded to in Davos."
Deutsche Bank, nevertheless, who also issued a report on the same subject last Friday, did see the ECB taking action on February 6th.
In their opinion the monetary authority would be wary of the risk of disinflation spreading to the 'core' countries of the economic and monetary union. Pressures in emerging markets could further aggravate disinflation in the euro area, the German broker added.
Lastly, an article in German magazine Der Spiegel held that Germany´s finance minister, Wolfgang Schaeuble, was planning on disbursing additional funds to Greece.