Outlook for U.K. Gilts Remains Bearish
0638 GMT - U.K. gilts continue to face a bearish outlook, Citi's rates strategist Jamie Searle writes in a note. Among the factors pointing to a bearish case are the coming fiscal plan that is meant to reassure, though it may just unnerve, he says. Another factor is that gilt issuance in the coming months is likely to be hard to absorb given uncertainty around the Bank of England's bank rate. Citi's strategists target 4.5% for 10-year gilt yield; on Thursday it closed at 4.194%, up two basis points, according to Tradeweb. The 10-year U.K. gilt-German Bund yield spread could widen to 230-250bps; it is currently around 205bps, according to Tradeweb. (emese.bartha@wsj.com)
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Contact: London NewsPlus; paul.larkins@wsj.com
(END) Dow Jones Newswires
10-07-22 0317ET
