Bonds: Yields slip on less hawkish second take from Fed's Powell
These were the movements in some of the most widely-followed 10-year sovereign bond yields:
US: 2.81% (-5bp)
UK: 1.47% (-3bp)
Germany: 0.64% (-1bp)
Spain: 1.51% (-3bp)
France: 0.91% (-1bp)
Italy: 1.95% (-3bp)
Portugal: 1.95% (-4bp)
Greece: 4.47% (+6bp)
Japan: 0.04% (-1bp)
Gilts moved higher, tracking gains in prices for longer-term US Treasuries as some analysts judged that US Federal Reserve chair Jerome Powell's second day of testimony, this time before the Senate Banking Committee, yielded a less hawkish policy bias.
"Powell maintained an upbeat view of economic prospects but was careful not to sound too overly hawkish. He said wage and inflation rates are unlikely surge higher," said Kathy Bostjancic at Oxford Economics.
Bostjancic also highlighted the new Fed chief's indication that further strengthening in the labour market could likely take place without fueling a large acceleration in wage growth.
Yields were also lower on the front end of the curve, with those on the benchmark two-year note off by four basis points at 2.21%.
Meanwhile, in economic news, the Department of Labor reported that initial jobless claims dropped by 10,000 to reach 210,000 over the week ending on 24 February - their lowest level since 1969.
In parallel, the Institute for Supply Management's closely-followed factory sector purchasing managers' index pushed higher still last month, rising from 59.1 in January to 60.8, its best print since May 2004.
IHS Markit's UK factory PMI also beat forecasts, but less so, dipping from 55.3 in January to a reading of 55.2 for last month (consensus: 55.0).
"Growth in the manufacturing sector is moderating, now that the recovery in the Eurozone has started to lose a little pace and more than 18 months have elapsed since sterling’s huge depreciation," said Pantheon Macroeconomics's Samuel Tombs.
"[...] All told, the manufacturing sector looks set to support GDP growth less this year than last, bringing a high risk that GDP growth undershoots the MPC’s expectations."