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

US: 1.91% (+1bp)
UK: 2.09% (-3bp)
Germany: 1.52% (-1bp)
France: 2.11% (-3bp)
Spain: 5.10% (+4bp)
Italy: 4.33% (+6bp)

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


Bond yields in the UK declined on Monday, pulling back after five straight days of gains, as investors looked to tap into higher borrowing rates following some gloomy comments by Prime Minister David Cameron.

UK gilts gained after Cameron said on Sunday in a BBC interview that the environment for the British economy is "tough". Speaking on The Andrew Marr Show, the PM said that the UK "needs low interest rates".

The yield on a 10-year UK bond was down three basis points at 2.09% today.

"The real test is what are the interest rates the rest of the world is demanding in order to own your debt [...] And our interest rates are extremely low, the lowest they've been really for centuries."

Gilt yields surged last week as increased risk appetite prompted investors to go in search for 'riskier' assets on the back of the fiscal cliff deal Stateside.

The borrowing rate on 10-year UK bonds rose above the relative French bond yield last week for the first time in two years. According to currency website, ExchangeRates.org.uk, this "underlines the declining overseas demand in UK bonds and the underlying vulnerability in the Pound."

10-year UK bonds yields started 2013 at around 1.83% and is now trading firmly above the 2% level. Thursday January 3rd marked the first time the borrowing rate broke through the 2% level since May 2012. It registered a record-low of 1.407% on July 23rd 2012.

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