UK gilts surge on rising tensions over Korean Peninsula, Trump’s renewed warnings

The UK gilts surged during mid-European session Friday after tensions soared over the Korean Peninsula, following fresh comments from the US President Donald Trump that rattled riskier assets, with investor demand pouring in for safe-haven instruments.

The yield on the benchmark 10-year gilts, slumped 3 basis points to 1.05 percent, the super-long 30-year bond yields plunged nearly 2 basis points to 1.72 percent while the yield on the short-term 2-year traded flat at 0.22 percent by 10:40 GMT.

The escalating war of words between US President Donald Trump and North Korean leader Kim Jong Un sent Asian markets tumbling as the region braced for more provocations from his regime next week. Australian Prime Minister Malcolm Turnbull said he would back the US if North Korea attacked. Japan, meanwhile, moved missile interceptors into place after North Korea threatened to fire rockets at Guam, the Nikkei newspaper reported.

Trump is ramping up pressure on North Korea, cautioning Kim’s regime against following through on threats to fire missiles near Guam and vowing “fire and fury” if he keeps provoking the US. On Thursday, the president doubled down on the rhetoric, saying Kim “should be very nervous” and suggesting the earlier warning didn’t go far enough.

Meanwhile, the FTSE 100 slumped 1.07 percent to 7,310.25 by 10:40 GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at -53.99 (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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