Eurozone government bonds in favor as Greece's IMF boost adds to ECB cheer

Eurozone government bonds were in demand on Friday as the cautious stance of policymakers cheered investors, while IMF support for a Greek bailout added to the general mood of goodwill towards the single currency bloc.

The European Central Bank left its ultra-easy monetary policy unchanged on Thursday and did not discuss clawing back stimulus, though ECB chief Mario Draghi did signal that those discussions would begin in its next one or two meetings.

Eurozone bond yields dropped across the board, with Italian, Portuguese and Spanish bonds - seen as the biggest beneficiaries of the ECB's largesse - proving particularly strong on the day.

The euro, meanwhile, jumped to a two-year high against the dollar.

"Draghi said that the ECB does not want to cause an unwanted tightening of monetary conditions which could harm the recovery," said BBVA...