Bonds: Brussels bombings spark small flight to safety bid

These were the movements in some of the most widely-followed 10-year sovereign bond yields:

US: 1.89% (-2bp)

UK: 1.454% (-2bp)

Germany: 0.22% (-1bp)

France: 0.56% (-1bp)

Spain: 1.43% (-1bp)

Italy: 1.25% (-0bp)

Japan: -0.10% (-0bp)

Greece: 8.79% (+7bp)

Portugal: 2.92% (-0bp)

Sovereign bond yields were pushed lower - but only slightly so - following a spate of bomb attacks in Brussels that claimed the lives of 34 persons and left almost another 200 injured.

However, in the case of the UK the drop came alongside a large move lower in cable, which as of 16:28GMT was trading lower by 1.12% to 1.4208.

Analysts at Bank of America-Merrill Lynch saw the possibility of a heightened backlash against refugees which might give an edge to the 'leave' campaign in the upcoming 23 June referendum on the UK´s continued membership of the European Union.

Weaker than expected consumer price data for February were also weighing on sentiment.

Consumer prices advanced at a 0.3% year-on-year clip in February, unchanged from the month before, but printed a tenth of a percentage point below what economists were forecasting.

Some segments of the market were harder hit than others, with the risk premium, measured by the spread on US Treasury notes, on emerging market bonds pushed higher by three basis points to 399 according to JP Morgan indices.

In parallel, Russian and Turkish stocks were knocked lower, with a benchmark for the latter, the Borsa Istanbul 100 index, down by 2.0% at the end of trading in Istanbul.

On a more positive note, German business confidence held up much better than had been expected in March.

The IFO institute´s business confidence gauge referencing the month of March recovered from a reading of 105.7 in February to 106.7 in March, breaking a three-month losing streak.

"Overall, the March Ifo business climate report confirms our long-standing suspicion that gloomy predictions heard in many quarters in recent months – partly indeed based on the Ifo index setback of the December-February period – have overstated matters," IHS Global Insight said in a research note sent to clients.

"We do not expect the terror attacks on Brussels to disrupt the stabilisation of economic surveys that the PMI, Ifo and ZEW data had suggested this morning after some declines in the months before. Helped by a fading of financial tensions and a strong ECB response to softer economic data, we expect the eurozone economy to return to trend growth of roughly 1.6% by mid-2016 at the latest after a soft patch now," Holger Schmieding at Berenberg said in a research note sent to clients.