UK gilts rally as investors freak over possibility of Brexit deadline extension

The United Kingdom’s gilts rallied during European trading hours Wednesday as investors their shifted attention towards riskier assets amid possibility of an extension of the Brexit deadline beyond this month.

The yield on the benchmark 10-year gilts, slumped 3 basis points to 0.679 percent, the 30-year yield suffered 2 basis points to 1.212 percent and the yield on the short-term 2-year plunged nearly 3 basis points to 0.510 percent by 11:15GMT.

Following House of Commons Speaker Bercow’s decision not to allow a meaningful vote on Monday on the Brexit deal, the Government released the text of the Withdrawal Agreement Bill (WAB). As such, two key votes look set to take place on the WAB. The first is the “second reading” motion, Lloyds Bank reported.

Media reports claim that it will be a key indication whether the Commons backs the deal. If that passes the HoC will then vote on a programme motion. That will commit to the Bill passing its Commons stages by Friday, which would mean it would be on course to be passed before the October 31 Brexit date, the report added.

Meanwhile, the FTSE 100 remained nearly flat at 7,160.19 by 11:20GMT.