Bonds: Investors look past deficit data for October, focus on ECB, Fed

US: 2.24% (-1bp)

UK: 1.87% (-1bp)

Germany: 0.48% (0bp)

France: 0.82% (+1bp)

Spain: 1.64% (-5bp)

Greece: 7.10% (+16bp)

Japan: 0.32% (+2bp)

Portugal: 2.49% (+4bp)

Gilts moved slightly lower following remarks from the president of the European Central Bank hinting at further monetary easing, possibly as soon as December.

Speaking at 25th European Banking Congress in Frankfurt, Mario Draghi said that if the monetary authority´s inflation stability mandate appeared to be threatened then the ECB, "will do what we must to raise inflation as quickly as possible".

That pressured two-year German government debt yields down to a record low of -0.39% and weighed on 10-year Bunds, which surrendered eight basis points over the week as a whole.

Yields on two-year Spanish government debt also fell into negative territory, at -0.1%.

Investors thus chose to look past data showing that UK public sector net borrowing (excluding public sector banks) in October was £8.2bn.

That was the largest October deficit since 2009 and higher than the consensus forecast for a shortfall of £6.0bn.

Stateside, the president of the St.Louis Fed, James Bullard, said on Friday that monetary policy should be more data-dependent and the central bank must be ready to be flexible, Bullard reportedly added.

"I think we are going to return to an era where there is a bit more uncertainty about what the (Fed's policy-setting) committee is going to do meeting to meeting," Bullard remarked.

The economy is headed into a 'boom' period, the rate-settered also said.

Overnight on Thursday, Fed Vice Chairman Stanley Fischer had said that Fed policymakers had done everything "we can to avoid surprising the markets and governments when we move."

Nevertheless, a final decision had not yet been taken, Fischer stated.

A decision to raise rates in December will be data-dependent, New York Fed president William Dudley said on Friday.