Bonds: DBRS confirms Portugal's investment grade credit

These were the movements in the most widely followed longer-term sovereign bond yields:

US: 2.28% (-3bp)

UK: 1.98% (-3bp)

Germany: 0.56% (-1bp)

France: 0.87% (-1bp)

Spain: 1.79% (-5bp)

Italy: 1.56% (-5bp)

Japan: 0.31% (+0bp)

Greece: 7.19% (-11bp)

Portugal: 2.76% (-3bp)

Bonds moved higher in another risk-off session as traders focused on weaker than expected growth data of the euro-bloc and a much-awaited decision from ratings agencies that could have seen Portugal excluded from the European Central Bank’s asset purchase programme.

After the close of trading in London, ratings agency DBRS announced its decision to keep the Iberian country’s long-term credit rating at the investment grade level.

That was critical because the ECB’s legal mandate requires that a country’s sovereign debt must be rated investment-grade by at least one agency to be included in its QE programme.

Acting as a backdrop, Eurozone gross domestic product expanded by 0.3% quarter-on-quarter over the three months to September, unexpectedly down by one tenth of a percentage point from the previous quarter’s pace. Analysts at Barclays highlighted what they termed a worrisome fall in levels of investment - the main long-term driver of any economy – in Germany.

Portugal also surprised with flat growth – as result of the political risks and the uncertainty that nation faces - while the Dutch economy shrank as the expansion in global trade cooled, the broker said.

Acting as a backdrop, Chinese growth concerns continued to linger if not simmer.

In a research report about the metals market and dated 12 November, Goldman Sachs said: “The lack of a significant pick-up in sequential activity in China’s ‘old economy’ since the collapse during the first quarter of 2015 is of increasing concern to us, given the easing in financial conditions over the past six months.”

Late in the afternoon, the president of the US Federal Reserve bank of Cleveland, Loretta Mester, said the time for the first interest rate hike was “quickly approaching”.

"Uncertainty about the longer-run destination is not an argument to delay taking the first step," she told her audience at The City Club of Cleveland.

US retail sales data for October revealed a rise of just 0.1% month-on-month, half what was expected by analysts, leading Barclays to trim its tracking estimate for fourth quarter 2015 GDP growth from 1.5% to 1.4%.