Bonds: Get it over with, hike now, El-Erian tells Fed

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

US: 1.69% (-4bp)

UK: 0.87% (-4bp)
Germany: 0.02% (-5bp)
France: 0.32% (-5bp)
Italy: 1.29% (-3bp)
Spain: 1.07% (-3bp)
Portugal: 3.27% (-3bp)
Greece: 8.47% +8bp)
Japan: -0.02% (-1bp)

Sovereign bonds registered a small bounce following sharp losses since the European Central Bank underwhelmed expectations for further easing on 8 September and traders bided their time ahead of the Monetary Policy Committee's meetings the next day.

Acting as a backdrop, Allianz SE's Mohamed El-Erian joined the Fed-hike-now camp, telling Bloomberg the US central bank should simply hike interest rates now and get it over with.

Gilts were no exception, despite better than expected employment data for August in the UK.

Nonetheless, most economists appeared to be of the view that there were still many uncertainties lingering in the air regarding the eventual fallout from Brexit.

Some, such as Samuel Tombs, chief UK economist at Pantheon Macroeconomics, believed Wednesday's employment report was weaker than it might appear on the surface.

The three-month average rate of employment did rise by 174,000, but supported by a surge in self-employment, Tombs quipped. A shift towards part-time work was also evident, he said.

"In addition, the tiny 3K rise in the three-month average number of job vacancies between May and August and the deterioration in surveys of employment intentions, point to much slower employment growth ahead," he said.

Meanwhile, euro area industrial production figures for July revealed a drop in output to a cyclical low, Pantheon said in a separate report.

Acting as a backdrop, reports continued to filtre-in buttressing speculation that the Bank of Japan was intent on focusing its bond purchases on the short-end of the curve.

That saw yields on five-year JGBs drop by two basis points to -0.20% while those on 30-year debt gained six basis points to 0.57%.