Bonds: Treasuries edge higher despite solid US jobs report for April

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

US: 2.35% (-1bp)
UK: 1.12% (+0bp)
Germany: 0.42% (+2bp)
France: 0.85% (+2bp)
Italy: 2.17% (-9bp)
Spain: 1.56% (-4bp)
Japan: 0.02% (0bp)
Greece: 5.84% (-13bp)
Portgal: 3.39% (-3bp)

Gilts ended on a flattish note going into next week's meeting of the Monetary Policy Committee, amid buying in euro area periphery bonds ahead of the run-off vote in the French presidential elections on Sunday.

Against the backdrop of the French elections, US data showing a strong comeback in US jobs growth during the month of April was seemingly brushed off by traders, who in fact nudged US Treasuries higher on the heels of that report.

Helping to explain the move higher in US government bonds perhaps was data released the day before showing weekly outflows from global equity funds reached $3.6bn, whilst inflows to bonds were running at $9.7bn.

However, strategists at Bank of America-Merrill Lynch interpreted the data as being 'inflation-off', noting how investors were not moving into TIPS but rather looking for higher yields.

Another factor to take into account in Friday's session was the move lower in the year-on-year rate of advance of US hourly earnings revealed in the April jobs report, from 2.7% to 2.5%, although some economists put that down to negative 'base effects'.

US non-farm payrolls jumped by 211,000 last month (consensus: 193,000), after a underwhelming gain of 79,000 in March, as the rate of unemployment ticked lower to 4.4% from 4.5%.

"On net, this report is solid but does not change our fundamental view of activity in the economy; the report does, however, increase our confidence that the soft patch in Q1 is over.

"Revisions to past months' data show less wage growth y/y than we had anticipated. Wage inflation simply is not taking root in the economy. We have no doubt that labor markets are tight and that they continue to tighten further but that pressure is failing to manifest in higher wage growth," said Michael Gapen and Rob Martin at Barclays Research.

Fed chair Janet Yellen and her number two, Stanley Fischer, did not comment on the outlook for monetary policy in their speeches on Friday.

San Francisco Fed chair John Williams on the other hand did, reportedly teling an audience the US economy remained on track, which should support one or two more interest rate hikes by the central bank in 2017, unchanged from his previous projections.