Bonds: Yields on Gilts end lower for a third week

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

US: 1.61% (+3bp)

UK: 1.14% (+3bp)

Germany: 0.02% (+4bp)

France: 0.43% (+3bp)

Italy: 1.51% (-3bp)

Spain: 1.56% (-4bp)

Japan: -0.15% (+4bp)

Portugal: 3.31% (-10bp)

Greece: 8.16% (-0.19%)

Longer-term bond yields bounced back after the killing of MP Jo Cox led to the suspension of campaigning on both side of the debate, winning markets a reprieve from a steady flow of poll results pointing to a steadily improving lead for the ‘Leave’ campaign.

Haven demand had seen German bund yields fall into negative territory earlier in the week, reaching a record low of -0.038%, alongside a string of gains for Japanese JGB prices.

The drop in German yields, in particular, led some market observers to the conclusion that the European Central Bank would increasingly struggle to find securities with yields above its -0.4% minimum bound for them to be eligible under the its purchase programme.

On Friday, the implied probability of a victory for the ‘Leave’ camp in the 23 June referendum had had fallen back below 40.0% after jumping past 44.0% during the previous day, according to Oddschecker’s survey of bookmakers.

Nonetheless, yields on the benchmark 10-year Gilt finished lower for a third consecutive week, having lost another 24 basis points.

To take note of, in a paper published on Friday the president of the Federal Reserve bank of St.Louis, James Bullard, identified himself as the rate-setter who in the Fed’s latest Summary of Economic Projections had predicted that interest rates would rise just once more in 2016, remaining at that level to the end of 2018.