UK Government Bonds Decline as Rising Oil Prices Fuel Inflation Expectations

Deep News19:10

UK government bonds extended their bearish flattening trend, underperforming German and US equivalents, as a renewed surge in oil prices heightened inflation expectations.

The yield on the 10-year UK gilt climbed by 5 basis points to 4.92%. In comparison, yields on 10-year German bunds and US Treasuries rose by 2 basis points to 3.09% and 1 basis point to 4.57%, respectively.

Interest rate swap contracts now indicate the market expects the Bank of England to implement approximately 34 basis points of interest rate hikes by year-end, an increase from the 30 basis points priced in on Friday.

Brent crude oil futures advanced by 3%, reaching $78.32 per barrel.

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