Bonds: Russian central bank reportedly calls emergency meeting, reports claim

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

US: 2.02% (+4bp)

UK: 1.67% (+5bp)

Germany: 0.45% (-3bp)

France: 0.78% (-5bp)

Italy: 1.56% (-9bp)

Spain: 1.72% (-7bp)

Portugal: 3.10% (+17bp)

Greece: 10.03% (-11bp)

Unexpectedly dovish words from European Central Bank president Mario Draghi drove a wedge between benchmark 10-year sovereign bonds on either side of the channel.

In his press conference after Thursday’s policy decision, Draghi said the monetary authority might reassess its policy stance when in next met, in early March, due to the weaker than expected inflation dynamics.

“Downside risks have increased again amid heightened uncertainties about emerging-market growth prospects. It would therefore be necessary to review and possibly reconsider our monetary-policy stance at our next meeting,” Draghi said.

That also saw yields on Austrian, Belgian, French two-year government debt hit record lows.

Gains in bonds were larger on the euro area’s periphery, as one might expect.

His words followed recent sharp selling in equity markets across the globe, a slide in oil prices and capital flight from China in anticipation of a weaker yuan and US Fed hikes.

On 20 January, the Nikkei-225, Footsie and Cac-40 joined the German equity benchmark and Brazil’s into bear-market territory, after having slid by over 20%.

Gilts and US Treasuries on the other hand saw profit-taking after the previous day’s sharp gains.

To take note of, Monetary Policy Committee member Martin Weale on Thursday published a study which supported the finding that trends such as shortened working hours, more women in the workforce, an older population and time spent on education had pushed unit-wage costs (the cost of labour to produce each unit of output) above what was apparent from just looking at average wages.

Further afield, several reports citing Izvestia said Russia's central bank had called an "emergency meeting" to discuss the rouble's weakening to record lows.

The greenback was 1.55% higher at 82.69 against the Russian currency as of 19:14GMT after hitting the 85.0 rouble mark earlier in the day.