Bonds: Government bonds rally on wall of fear

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

US: 2.72% (-3bp)

UK: 1.26% (-6bp)

Germany: 0.18% (-4bp)

France: 0.58% (-5bp)

Italy: 2.66% (-9bp)

Spain: 1.24% (-7bp)

Portugal: 1.65% (-6bp)

Greece: 4.15% (-3bp)

Japan: 0.01% (+1bp)

The long end of the government bond curve was the place to be on Thursday, with large downwards moves both for Gilts and euro area periphery issues.

That was despite the release of data showing a drop in initial US jobless claims for the week ending on 18 January to 199,000, marking the first sub-2000 reading since 1969.

Commenting on those numbers, Ian Shepherdson at Pantheon Macroeconomics said: "these data are consistent with our view that the rise in claims in Q4 was mostly due to the two hurricanes and the California wildfires, rather than a fundamental deterioration in the job market. As far as we can tell, the underlying trend in claims remains extremely low."

In the background however, financial markets remained a tad jittery as month-end approached, bringing with it the second round of US-China trade talks.

A downgrade by the European Central Bank of its balance of risks assessment for the Eurozone also contributed to the move.

Against that backdrop, late in the afternoon US Commerce Secretary, Wilbur Ross, told CNBC that the US and China remained miles away from reaching a trade deal, although later in the day, US Treasury Secretary, Steve Mnuchin, would tell an audience that Washington and Beijing were "making a lot of progress".

To take note of, most of the headlines coming out of Davos from the world's top financial sector executives was quite downbeat, emphasising both the near-term risks that existed for financial markets and the longer-term risk of another recession or crisis at some point further down the line.