Bonds: Gross calls 2.0% top for Fed funds rate
These were the movements in some of the most closely-followed 10-year sovereign bond yields:
US: 2.34% (-1bp)
UK: 1.23% (-3bp)
Germany: 0.30% (-3bp)
France: 0.61% (-1bp)
Spain: 1.43% (+2bp)
Italy: 1.73% (+2bp)
Portugal: 1.88% (-1bp)
Greece: 4.81% (-3bp)
Japan: 0.06% (+1bp)
Gilts moved higher, alongside similarly-dated US and German government debt, ahead of the key monthly US jobs report for November that was set for release on Friday and the upcoming Federal Reserve policy meeting in the following week.
Ahead of those two key risk events, 'market chatter' was all about profit-taking in risky assets globally following a strong year thus far as well as political risks in the States.
"As discussed in our FX Perspectives last week, we do not see the US tax plan as fundamentally supportive of the USD. Furthermore, headline risk remains higher than under previous administrations, not least due to the recurring allegations concerning top US officials," analysts at UniCredit Research said in a note sent to clients.
On a related note, on Wednesday the so-called 'Bind King', Bill Gross, told Bloomberg News that a Fed funds rate above 2.0% might not be sustainable.
However, the current yield spread between two and 10-year US Treasury notes was, Gross reportedly said.
Indeed, at one point in Wednesday's session that spread reached its narrowest in a decade - at 50 basis points.
Against that backdrop, consultancy ADP reported that US private sector payrolls grew by 190,000 in November (consensus: 190,000), after a rise of 235,000 in the month before.
In response, Ian Shepherdson at Pantheon Macroeconomics said: "what's not clear from these data is whether the ADP shortfall signals that surveys are overstating demand, or simply that employers can't find all the people they want to hire, given the 4.1% unemployment rate. Either way, we have to temper our expectations for Friday's number after this report; we now look for a 180K official headline. Sustained gains at that pace are enough to keep the unemployment rate on track to reach just 3.5% by mid-2018. The rate hasn't been seen since 1969, whencore CPI inflation was 6%."
Meanwhile, the Department of Labor reported that unit labour costs in the States fell at a 0.7% pace year-on-year during the third quarter.
For the three months to September, and in terms of quarterly rates of change, unit labour costs were down by 0.2% (consensus: 0.3%), the same revised figures from Labor revealed.