Bonds: Treasuries gain after Yellen comments

These were the movements in the yields of some of the most widely followed sovereign bonds:

US: -6bp (1.99%)

UK: -2bp (1.74%)

Germany: -1bp (0.37%)

France: -0bp (0.59%)

Italy: +1bp (1.50%)

Spain: +1bp (1.39%)

Portugal: +1bp (2.12%)

Japan: +0bp (0.38%)

Greece: -87bp (8.7%)

US Treasury yields fell back following more dovish than expected testimony from US Fed chair Janet Yellen in her semi-annual speech before the US Senate’s banking committee.

The key passage from Yellen's official speech seems to have been the following: "This judgment [at the January FOMC] reflects the fact that inflation continues to run well below the Committee's 2% objective, and that room for sustainable improvements in labor market conditions still remains."

Greek bond yields fell back sharply after European officials approved the Mediterranean country’s reform proposals submitted on Monday night.

That paves the way for a four-month renewal of its current bail-out programme and ensures Greek lenders will no longer need to fear losing access to funding markets.

German lawmakers are set to vote on the measures on 27 February but indications already are that Berlin will not seek to block the agreement.

In remarks before the Treasury Select Committee BoE Governor Mark Carney pledged to return the rate of consumer price inflation to the central bank’s 2% target “within a reasonable horizon”.