Yields and basis point (bp) movements of some of the most-watched 10-year bonds this afternoon:

United States 1.86% -3bp
Germany 1.49% -3bp
Britain 2.02% -6bp
France 2.10% -1bp
Italy 4.29% -5bp

Yields were down almost across the board today.

Indeed the only countries that saw bond yields rise were Brazil and Portugal - and even then only by one and three basis point respectively.

There's a feeling that despite challenges for the global economy (the Eurozone posted a new record rate of unemployment on Tuesday, for example) there may be signs that risk aversion is on the wane.

Chris Ralph, Chief Investment Officer at St James's Place Wealth Management points out that the UK's 10-year gilt yield has crept above 2% for the first time since May last year.

"This is seen by some as a tentative sign that the flight from equities seen in the last few years might be going into reverse, as investors draw encouragement from recent events," he said.

"Aversion to risk since 2008 has seen money ploughed into 'safe havens', with the result that shares have become cheap relative to bonds, property and just about anything else.

He quotes the ubiquitous Jim O'Neill, Chairman, Goldman Sachs Asset Management, who said: "Most markets remain rather cheap based on conservative valuation criteria, so any good news results in money coming into equities".

MM

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