At 0855 GMT, the March gilt future was 12 ticks lower at 116.54, after hitting a three-week high of 117.78 last week, while the equivalent Bund future was 8 ticks lower.

"A light data calendar will leave European markets focusing on news flow over the weekend," said Barclays strategists.

Speaking in Davos, Carney said that monetary policy is not yet "maxed out" and that "there continues to be monetary policy options in all major economies", according to media reports.

Some analysts interpreted the comments as suggesting Carney might tolerate higher inflation if needed to support growth.

The remarks contrasted with the tone from outgoing BoE Governor King's set last week, who reiterated his view that monetary policy cannot be a panacea for boosting economic output, said Barclays strategists.

"Even if Mr Carney were to advocate policy that tolerates persistent inflation while output recovers, it is not clear this would garner unanimous support on the Monetary Policy Committee and could risk market-based inflation expectations becoming unanchored," they added.

Investors expect a 30-year bond issue to take place this week, which strategists expect to well received by the market.

'Ten-year gilt yields rose 2 basis points to 2.07 percent, while their spread with Bund yields was 1 basis point wider at 43 basis points.