Bonds: US, UK banks have good liquidity position, Fed´s Tarullo says

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

US: 1.39% (+2bp)
UK: 0.77% (-1bp)
Germany: -0.18% (+1bp)
France: 0.13% (+0bp)
Spain: 1.24% (-2bp)
Italy: 1.17% (-2bp)
Greece: 7.95% (-5bp)
Portugal: 3.05% (+5bp)
Japan: -0.27% (-2bp)

Gilts finished a volatile session with slight gains that saw yields drop to an intra-day low of 0.72%, alongside a weakening pound that hit a 31-year low below 1.28 versus the greenback during Asian trading hours.

That followed news that three UK property funds had temporarily halted redemptions on Tuesday.

To take note of, two top-ranking US central bank officials weighed in on the possible impact of Brexit on Wednesday.

New York Federal Reserve president William Dudley reportedly said that the implications of Brexit might be greater were it to trigger turmoil in markets beyond the UK.

On Wednesday afternoon, Fed governor Daniel Tarullo followed up with his own views.

Speaking at an event sponsored by The Wall Street Journal Tarullo said the world´s financial system was "reasonably well prepared" for the initial shoch from Brexit, adding that UK and US banks were in a very viable liquidity position.

"The one thing we are concerned about is there is a good bit of uncertainty as to what the future holds for the precise relationship of the UK to the European Union," he said. "And then there's uncertainty, as everyone knows, of an inhibiting effect upon investing decisions and maybe household decisions as well. How much of that turns out to be the case, we'll just have to wait and see."

As regarded the US, he said he was not yet convinced that inflation was headed back towards the Fed´s 2.0% target.

"For some time now, I have thought it was the better course to wait to see more convincing evidence inflation is moving towards and will remain around the 2% target. I certainly to this point have not seen that kind of evidence," Market News International cited him as having said.