The UK gilts surged Wednesday after tensions mounted over the Korean Peninsula, raising worries of a nuclear attack on the US, as is threatened by North Korea, including targeting the US Pacific island territory of Guam, the latest salvo in an increasingly aggressive back-and-forth between Pyongyang and Washington.
The yield on the benchmark 10-year gilts, slumped nearly 4 basis points to 1.11 percent, the super-long 30-year bond yields plunged 4 basis points to 1.76 percent and the yield on the short-term 2-year traded 2-1/2 basis points lower at 0.20 percent by 10:40 GMT.
North Korea said on Wednesday it is considering plans for a missile strike on the U.S. Pacific territory of Guam, just hours after President Donald Trump told the North that any threat to the United States would be met with "fire and fury". The sharp increase in tensions rattled financial markets and prompted warnings from U.S. officials and analysts not to engage in rhetorical slanging matches with North Korea.
The threat from North Korea’s nuclear and missile programs has been a top foreign policy priority for Trump since taking office in January, but the dangers posed by North Korea have taken center stage since the country test-fired two intercontinental ballistic missiles last month.
Meanwhile, the FTSE 100 traded 0.80 percent lower at 7,482.50 by 10:50 GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at 12.09 (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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