Bonds: Gilts outperform, but Capital Economics sticks to call for three hikes in Bank Rate

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

US: 2.81% (-3bp)

UK: 1.44% (-5bp)

Germany: 0.59% (-3bp)

France: 0.84% (-3bp)

Spain: 1.40% (+0bp)

Italy: 2.01% (+2bp)

Greece: 4.17% (+3bp)

Portugal: 1.80% (+0bp)

Japan: 0.05% (-0bp)

Gilts outperformed on Thursday amid bullish news from both the other side of the Pond and from across the Channel.

Stoking buying interest, the US Department of Commerce reported a 0.1% month-on-month dip in retail sales volumes, which came in well below the 0.3% rise that economists had been anticipating.

Earlier in the session, speaking at The ECB and Its Watchers conference, central bank chief Mario Draghi said rate-setters needed to be patient, persistent and prudent, adding that risks and uncertainties remained around the outlook.

Against that backdrop, analysts at Capital Economics weighed in with a bearish view.

Yes, Tuesday's Debt Management Report from the Treasury had revealed that Gilt issuance would be more limited in 2018 than prevuiously anticipated.

However, "we know that future gilt issuance will be more limited than was previously expected. But we doubt the upward trend in gilt yields that we saw at the beginning of the year will remain on ice for too long."

As wage growth picked up and inflation fell back, household consumption was set to rise they said, boosting GDP growth and paving the way for three hikes in Bank Rate by year-end, starting from May.

Traders were also monitoring progress on the $1.2trn spending bill making its way through Capitol Hill - which was needed to keep the government funded past 23 March - amid reports of some small delays.