UK gilts slump on improving risk appetite following progress in Brexit negotiations; eyes Annual Budget release

The UK gilts slumped Tuesday as investors’ risk sentiments improved, following the progress in Brexit negotiations and the demand by Prime Minister Theresa May for a free trade deal. Investors are now eyeing the Annual Budget release, scheduled for March 7 by 12:30GMT for detail direction in the debt market.

The yield on the benchmark 10-year gilts, jumped nearly 2-1/2 basis points to 1.52 percent, the super-long 30-year bond yields surged 3 basis points to 1.93 percent and the yield on the short-term 2-year too traded 1 basis point higher at 0.82 percent by 09:40GMT.

Theresa May’s chances of securing a deep free-trade deal with the EU were dealt a blow when Stefaan de Rynck, the main adviser to the EU’s chief Brexit negotiator, Michel Barnier, stressed that the rules of the single market required far more than her chief proposal – a mutual recognition of standards.

May claimed in her speech last Friday that the UK could negotiate a future trade relationship based on mutual recognition of standards overseen by a third party court, made up of EU and UK nominees.

Meanwhile, the FTSE 100 traded 0.95 percent higher at 7,184.00 by 09:40 GMT, while at 09:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at 53.23 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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