Bonds: Gilts underperform despite bumper demand for very long-term dated Gilts

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

US: 1.927% (+1bp)

UK: 1.66% (+5bp)

Germany: 0.30% (+4bp)

Spain: 1.64% (-0bp)

France: 0.64% (+3bp)

Italy: 1.54% (+0bp)

Japan: -0.10% (-4bp)

Greece: 8.60% (+2bp)

Portugal: 3.22% (-8bp)

Gilts were on the backfroot as the pound continued to gain altitude, reflecting lowered risk aversion ahead of the 23 June vote on continued membership of the European Union.

However, analysts cautioned there was still a risk of a near-term perversal in market sentiment, although the 'Remain' camp was expected to ultimately prevail.

The retreat in Gilts came despite solid cuptake of the near-50 year debt put on sale by the Debt Management Office.

According to the banks underwriting the deal, the DMO´s reopening of the 2.5% bond maturing in 2065 was heavily oversubscribed, attracting £21bn of bids versus the £4.75bn on offer.

Acting as a backdrop, some market commentary was questioning whether the recent rise in yields, especially in the States, was not yet another 'false-dawn'.

From a fundamental standpoint, Credit Suisse strategist Andrew Garthewaite said he expected yield curves to steepen.

"The oil price is up c.55% from its low but US 10-year bond yields are down c.20bps since the low in the oil price; a rise in oil price of this magnitude has never historically been associated with a fall in bond yields," Garthwaite said in a research report sent to clients.

"What is the explanation behind the decoupling between bond yields and cyclicals? In our view, the most important explanation is Janet Yellen, whose language became more dovish as markets, PMIs and financial conditions all improved," he added.

Yields on JGBs heading in the opposite direction, with traders cautious ahead of the Bank of Japan´s policy meeting on 29 April.

Twenty-three of the 41 analysts cranvassed by Bloomberg were expecting rate-setters to expand policy stimulus at that meeting.

Weak data on US durable goods orders may have weighed on the prices of longer-dated US Treasuries.

Excluding the transportation sector, orders for goods made to last more than three years sharnk by 0.2% month-on-month (consensus: 0.5%).

Further afield, the yield on two-year Greek government debt was up sharply, rising by 77 basis points to close at 10.89%.

Worth notewing, Brazil´s O Globo newspaper reported that former central bank chief Henrique Meirelles would become the next finance minister if president Dilma Rousseff were ousted.