UK bond yield drops to record as in­vestors seek safer as­sets

The Pak Banker - - MARKETS/SPORTS -

LON­DON: UK govern­ment bonds ad­vanced, send­ing the 10-year gilt yield to the low­est on record, as global stock mar­kets re­sumed de­clines and boosted de­mand for the rel­a­tive safety of sov­er­eign debt. Gains in gilts came af­ter U.S. Fed­eral Re­serve Chair Janet Yellen added to cau­tion in the mar­kets say­ing Wed­nes­day that weak­en­ing stock prices posed a risk to the econ­omy. Global equity mar­kets have lost $7.6 tril­lion this year. U.K. pol­icy mak­ers voted unan­i­mously last week to hold in­ter­est rates at a record low as tum­bling oil prices di­min­ish the out­look for price growth. "It's dif­fi­cult to see what breaks the trend near-term," said Ja­son Simp­son, a strate­gist at So­ci­ete Gen­erale SA in Lon­don. "Oil is down, eq­ui­ties are softer, so from that per­spec­tive it may be ca­pit­u­la­tion trades.

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