U.K. government bonds fell, with 10-year yields touching a two-month high, after Federal Reserve minutes showed officials may reduce debt purchases and data pointed to accelerating British growth.
Gilts underperformed other European sovereigns, with the extra yield that investors demand to hold U.K. 10-year bonds instead of similar-maturity German bunds expanding to the most since October 2005. The pound strengthened versus all of its 16 major counterparts, reaching three-year highs against the Australian and Canadian dollars, after an industry report showed a measure of new orders at British factories rose to the highest in almost two decades in November.
“There’s a spillover into the U.K. from what the Fed did,” said Sam Hill, a U.K. rates strategist at Royal Bank of Canada in London. Gilts are “under pressure,” he said.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.