Foreign Investors Selling UK Bonds in January at Fast Pace

Foreign investors sold British government bonds in January at the fastest pace in nearly three years, probably reflecting how funds are adjusting gilt holdings after a buying spree late last year rather than nerves about Brexit, analysts said.

Overseas investors sold a net 7.59 billion pounds of gilts in January, the biggest monthly drop since March 2014 and following on from 2.97 billion pounds of sales in December, Bank of England data showed on Wednesday.

The central bank is watching closely for signs that foreign investors – responsible for plugging Britain’s big current account deficit – are starting to shy away from British assets as the process of leaving the European Union gets underway.

January’s outflow scythed the rolling three-month total purchases from foreign investors down to 5 billion pounds. Two months ago that measure stood at 39.43 billion pounds, the highest since BoE records began in 1986.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza