Bonds: Gilts underperform by a wide margin

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

US: 1.72% (-2bp)

UK: 0.97% (+10bp)
Germany: 0.02% (+4bp)
France: 0.32% (+4bp)
Spain: 1.02% (+1bp)
Italy: 1.38% (+4bp)
Portugal: 3.58% (+7bp)
Greece: 8.32% (+5bp)
Japan: -0.06% (+0bp)

Longer-term Gilts underperformed by a very wide margin at the end of the week, amid a large drop in the value of sterling.

For the week, the yield on the benchmark 10-year Gilt finished higher by 23 basis points - having breached the psychological 1.0% mark at one point - breaking the post-Brexit pattern of lower yields alongside a weaker pound.

Some market commentary appeared to highlight the strident tone against "international elites" adopted by the Prime Minister at the Tory party conference at the start of the week as a chief factor behind the mayhem in foreign exchange markets on Friday, as some observers were led to question just how "open" the UK would remain.

To take note of as well, during the past week at least one high-ranking Bank of England official indicated that past a certain threshhold weakness in sterling might impact on the outlook for monetary policy.

Furthermore, some market observers also took note of Westminster´s plans to increase spending on infrastructure financed by issuing debt.

Acting as a backdrop, the latest US non-farm jobs report left economists divided, with several describing it as "solid" but others more inclined to see it as lacklustre.

The US economy generated 157,000 jobs in September, down from an upwardly revised figure of 167,000 for the prior month, while the unemployment rate edged up by a tenth of a percentage point to 5.0% (consensus: 4.9%).

On a cheerier note, the labour force participation rate was the main reason behind the increased rate of joblessness and other details of the report were also strong, such as the index of aggregate weekly hours.

Be that as it may, ahead of Columbus Day (in observance of which US fixed income markets were to remain closed) and Sunday´s second televised debate between the two US presidential candidates, 10-year Treasuries finished slightly higher.