Bonds: Yield on 10-year Gilts closes at record low after US jobs report

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

US: 1.70% (-10bp)

UK: 1.28% (-7bp)

Germany: 0.07% (-5bp)

France: 0.41% (-5bp)

Italy: 1.33% (-4bp)

Spain: 1.47% (-1bp)

Japan: -0.10% (+1bp)

Portugal: 3.16% (+0bp)

Greece: 7.315 (+2bp)

Sovereign bonds were higher almost across the board on Friday, after jobs figures Stateside led many economists to rachet down their expectations for the pace of interest rate hikes in the US.

Nonetheless, by the close of trading markets were still attaching a small chance to a further dose of tightening from the Fed come July´s FOMC meeting.

US non-farm payrolls increased by just 38,000 in May - the least since 2010 - missing economists´ forecasts for a gain of 160,000 by a wide margin.

As a result, yields on benchmark 10-year Gilts and German Bunds ended the session at record lows of 1.28% and 0.05%, respectively.

Five, eight and nine-year German government debt all saw their yields drop to record lows.

To take note of, some market commentary linked the increased spread between German and Italian debt to heightened risks of Brexit, which could be expected to be of greatest trouble for the euro area´s periphery.

Stateside, the yield on the benchmark 10-year US Treasury note slumped 10 basis points to 1.70% and that on the policy-sensitive two-year note by 12 basis points to end the day at 0.77%.

"That payroll growth has fallen below the current expansion average in three of the past four months signals to us that risks of a near- to medium-term recession have risen.

"In terms of what the May employment report implies for our outlook for monetary policy, we see this report as taking a June rate hike off the table and likely does the same for July since, in our view, FOMC members will likely want to see at least two months of evidence that hiring has rebounded before moving to another rate hike," Barclays´s Michael Gapen said in a research note sent to clients following the release of the US jobs numbers.

Speaking at the Council on Foreign Relations, in Washington, on Friday afternoon, Fed governor Lael Brainard said that waiting to have complete information on the US economy´s performance in the second quarter before hiking interest rates again might be "advantageous".

"In this environment, prudent risk management implies there is a benefit to waiting for additional data to provide confidence that domestic activity has rebounded strongly and reassurance that near-term international events will not derail progress toward our goals," she said.

Earlier on Friday, Chicago Fed president Charles Evans said he expected to see two further interest rate hikes in 2016, although there might be arguments in favour of waiting for core inflation to rise to the central bank´s 2% target.

Further afield, ratings agency S&P kept South Africa´s long-term foreign currency debt rating at BBB-, one notch above so-called 'junk' territory, albeit with a 'negative' outlook.

Over in Colombia, figures on first quarter gross domestic product growth revealed the economy expanded at a 0.2% quarter-on-quarter (2.5% year-on-year) pace, prompting speculation that the current tightening cycle for monetary policy might be nearing an end in that South American country.