Government bonds

Both Germany and France have ruled out common eurozone bonds as a solution to the bloc's debt crisis, the FT has reported.

AN EVENTFUL WEEK

The FTSE dropped more than 3% in early trading on Friday, following US and Asian markets sharply lower as the global sell-off continues.

The European Central Bank (ECB) has voted to hold interest rates and will boost liquidity in the eurozone in an attempt to prevent the sovereign debt crisis from spreading to Italy and Spain.

PIMCO's Bill Gross has slammed US policymakers for their failure to make a significant dent in the country's $1.5trn deficit, despite reaching an accord on the debt ceiling.

Spanish and Italian government borrowing costs have hit eurozone-era highs as investors continue to worry over the state of their respective economies.

QUALITY NOT QUANTITY

Invesco Perpetual remains positive on the prospects for the Spanish economy despite Moody's hinting it may downgrade the nation's credit rating this morning.

Yields on 10-year UK government bonds dipped below those of US treasuries for the first time in two years today as financial markets began to price in a US default.

Barings' Andrew Cole has slashed the equity weighting on his £28.1m Multi Asset fund by 15% in favour of government bonds as his team becomes increasingly risk averse.