Bonds: Gilts and US Treasuries underperform

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

US: 1.60% (+4bp)
UK: 0.75% (+2bp)
Germany: -0.12% (-0bp)
France: 0.19% (+0bp)
Italy: 1.19% (-2bp)
Spain: 0.88% (-4bp)
Portugal: 3.33% (+2bp)
Greece: 8.28% (+2bp)
Japan: -0.09% (-1bp)

A slate of slightly stronger-than-expected US and UK data saw the prices on longer-term sovereign bonds on each side of the Atlantic diverge.

However, a late-day report that the US Department of Justice and Deutsche Bank might be nearing a settlement helped to narrow the resulting gap.

Worth noting too, addressing an audience on Friday afternoon, Dallas Fed president Robert Kaplan reportedly said he saw no evidence that the US was overheating, so the monetary authority could be patient in tightening policy.

Nevertheless, he reportedly also said he saw "some" signs of distortions linked to low interest rates which worried him.

Personal incomes in the States rose by 0.2% month-on-month in August, according to the Department of Commerce, as expected by economists, but nominal spending was flat.

Economists had forecast that personal consumption expenditures would rise by 0.2% in August when measured at current dollars.

In real terms, adjusted for inflation that is, consumption dipped by 0.1% over the month after a 0.3% increase in July.

Over in the euro area, it was Spanish bonds that outperformed, after Standard&Poor's reaffirmed its rating on the country's long-term debt at BBB+, together with a 'stable' outlook.