Bonds: Fed set to continue tightening gradually, minutes show
These were the movements in some of the most widely-followed 10-year sovereign bond yields:
US: 2.82% (-1bp)
UK: 1.27% (+0bp)
Germany: 0.34% (+1bp)
France: 0.69% (+2bp)
Spain: 1.38% (+1bp)
Italy: 3.06% (+7bp)
Portugal: 1.79% (+2bp)
Greece: 4.21% (-3bp)
Japan: 0.10% (+1bp)
Sovereign bonds were little changed on Wednesday even as the minutes of the US central bank's last policy meeting revealed that, despite the scant changes made to their policy statement following that meeting, policymakers had in fact discussed a host of issues that had long been on the minds of market participants.
Those included the potential threat from an escalation in trade tensions and the flattening of the US Treasury yield curve.
Indeed, should there be a serious escalation in trade tensions, some rate-setters said that a pause in rate hikes would be needed.
Policymakers also agreed that they would soon need to stop saying that policy remained 'accomodative' which, it might be argued, mark a milestone in itself.
Nevertheless, they continued to express confidence in the economy, signalling that the pace of "gradual" rate hikes was set to continue.
Commenting on the content of the minutes, Barclays's Michael Gapen said: "Overall, the message from the July FOMC statement about a strong economy is in line with recent minutes as the Fed's preferred adjective has become 'strong.' The July FOMC statement contained 32 references to the word 'strong' against only three last November.
"That said, participants thought gradual rate hikes remained appropriate for a number of reasons."
Against that backdrop, earlier in the session the National Association of Realtors had reported a 0.7% month-on-month decline in the annualised rate of new home sales to 5.43m (consensus: 5.45m) - its weakest level for two-and-a-half years.
In the background meanwhile, PIMCO's chief investment officer, Marc Seidner, had come out to say that he saw a 70% probability of a global recession starting over the next five years.