Bonds: Yields back up ahead of Fed decision

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

US: 2.29% (+3bp)
UK: 1.95% (+1bp)
Germany: 0.68% (+4bp)
France: 1.01% (+3bp)
Italy: 1.69% (+1bp)
Spain: 1.76% (-0bp)
Portugal: 2.58% (+1bp)
Greece: 8.26% (-47bp)

Sovereign bond yields backed up slightly ahead of the US Federal Reserve´s historic meeting later in the day.

The Federal Open Market Committee was widely expected to announce a 25 basis point increase in the Fed funds rate, the first hike in almost 10 years.

Gilts outperformed however, following a sharp slowdown in UK wage pressures.

Core weekly earnings slowed down sharply, from a downwardly revised clip of 2.4% year-on-year for the three months to October to 2.0% (consensus: 2.3%), according to the latest data available from the Office for National Statistics.

Stateside, the last batch of economic reports before the Fed´s decision was mixed, with housing rebounding far more strongly than expected in November.

However, the latest US industrial production and manufacturing PMI figures undershot analysts´ expectations by a wide margin.

The industrial and factory data drew a mixed reaction from economists, with some waring they were a warning signal that economic momentum was slowing going into 2016.