Bonds: Gilts finish off lows in whipsaw price action
These were the movements in some of the most widely-followed 10-year sovereign bond yields:
US: 1.76% (-4bp)
UK: 1.12% (+3bp)
Germany: 0.06% (-0bp)
France: 0.34% (+0bp)
Spain: 1.11% (-1bp)
Italy: 1.40% (+2bp)
Portugal: 3.25% (-5bp)
Greece: 8.44% (+6bp)
Japan: -0.05% (+0bp)
Longer-term Gilt prices finished lower, but well above their lows of the session, ahead of UK and US consumer price data referencing the month of September scheduled for the following session.
The yield on the benchmark 10-year Gilt finished three basis points higher after hitting an intra-session peak of 1.221% - a fresh post-Brexit high.
Bond yields move inversely to prices.
The move higher in yields followed recent data which revealed investors had been reducing the so-called duration (a measure of a bond's sensitivity to interest rate changes) of their fixed income holdings in anticipation of governments around the world would either reducing policy accommodation or shifting towards fiscal stimulus, or both.
During the week ending 12 October, EPFR data referenced by Bank of America-Merrill Lynch revealed a seventh straight week of outflows from funds investing in bonds with a duration greater than six years.
Nonetheless, that need not mean investors had 'lost faith' in the UK, said analysts at Capital Economics.
The bulk of the move higher in 10-year yields, from around 0.5% in mid-August to a "still very low 1.15%" could be explained by the jump in expected inflation, "which already seems to be leveling out".
In parallel, the cost of insuring against a sovereign default by HM Treasury as measured in CDS premia were also back to where they were prior to the referendum, which should encourage the doves at the Bank, Capital Economics's Julian Jessop said.
To take note of, earlier in the session, in remarks to BBC Radio, the Bank of England's Michael Broadbent emphasised the importance of a floating exchange rate as a 'shock-absorber' and indicated he was not unduly concerned about the possibility of inflation rising "somewhat" above the monetary authority´s target over the next few years.
Nordea Bank's Stable Return fund, the Continent's fastest growing asset manager, was now positioning itself for Sterling to appreciate, Bloomberg reported earlier on Friday.