Government bonds

Italian and Spanish bond yields have cooled in early trading after yesterday hitting their widest spread over German bunds since the inception of the euro.

Announcing a haircut on Greek bond holdings would help restore a positive mood to bond markets, which have largely priced in such a move, said DWS Investments' CIO Asoka Wöhrmann.

Spain is facing the same danger of default as Greece, Ireland and Portugal, said M&G's Mike Riddell, following the lacklustre Spanish government bond auction yesterday.

Australian, Norwegian and Canadian government bonds are the new safe haven for bond investors, Ariel Bezalel, manager of Jupiter's £418m Strategic Bond fund, has said.

Iceland is poised to re-enter the bond market for the first time since the collapse of its major banks.

ON BONDS

Henderson's John Pattullo and Jenna Barnard have closed out short duration positions in gilts and treasuries after revising their interest rate expectations.

Yields on Greek 10-year government bonds have rocketed to record levels as fears rise the nation could default on its debt repayments, the FT reports.

ON BONDS

Invesco Perpetual managers Paul Causer and Paul Read have trimmed high yield and credit exposure in favour of government bonds, including Spanish government debt, on their £3.2bn Monthly Income Plus fund.