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

US: 1.97% (-3bp)
UK: 2.11% (+1bp)
Germany: 1.57% (-1bp)
France: 2.23% (n/c)
Spain: 5.15% (-5bp)
Italy: 4.45% (-5bp)

[NOTE: there are 100bp to a percentage point]

The tone to sovereign debt markets in the developed world was broadly positive on Friday despite it being a 'risk-on' day in general.

Helping to keep yields tethered were the supportive remarks attributed to Fed Chairman Bernanke by Bloomberg, overnight, according to which he recently demonstrated in a private meeting that he had few worries regarding the risks which some associate with the central bank's quantitative easing program.

Also helping sentiment were the rather soothing speeches made today by the President of the Federal Reserve bank of Boston and his peer Governor Jerome Powell in two separate speeches.

All eyes will now turn - as regards the Fed - to Bernanke's congressional testimonies next week, where he will have the chance to correct any misperceptions as to his current stance.

Gains in the Eurozone periphery were noteworthy, coming as they did ahead of the Italian elections this next weekend, which may indicate that traders have already prepared and shielded themselves against that risk.

Nevertheless, and also buoying Eurozone bonds, was data from the European Central Bank (ECB) showing that on the next February 27th banks intend to repay far fewer of their loans (€61.1bn) from the ECB than economist had expected.

No less relevant, the European Commission today lowered its growth forecast for the single currency area this year, to -0.3% from a previous forecast of 0.1%.
There was some negative market chatter as regards France's fiscal position.

Lastly, and back in the UK, overnight Monetary Policy Committee member David Miles presented a model according to which - under certain circumstances - the Bank of England may yet have to repurchase up to £175bn of gilts.

AB

Related share prices