UK gilts tumble as latest Brexit poll

20 June, 2016

The UK gilts continue to trade lower on Monday as recent polls suggested that ‘Remain’ camp is ahead in the run-up to the EU referendum against ‘Leave’. Also, rising crude oil prices and firm equities drove-out investors from fixed income securities.

The yield on the benchmark 10-year gilts rose more than 8 basis points to 1.226 percent, yield on super-long 40-year bonds also jumped nearly 8 basis points to 1.879 percent and the yield on short-term 2-year note climbed nearly 7 basis points to 0.459 percent by 10:00 GMT.

A recent opinion poll showed that British voters have swung and now started to favour remaining in the European Union. A YouGov poll for The Sunday Times newspaper published at the weekend showed 44 percent supported remaining in the EU, as compared to 43 percent who supported leaving, based on interviews conducted on Thursday and Friday. Two other polls also showed public opinion tilted towards the 'Remain' camp after the killing of a UK politician Jo Cox on last Thursday.

The implied probability of a 'Remain' vote in Thursday's EU referendum has hardened further, to 74.6 percent, after jumping to 72 percent earlier in the Asian session, up from 60 percent to 67 percent, on Friday, according to the latest odds from bookmaker Betfair.

Also, the final European Union referendum phone poll by BMG Research showed Bremain at 53.3 percent vs Brexit on 46.7 percent. On the other hand, including the ‘undecided’, vote for Remain stood at 46 percent vs Leave 43 percent and undecided 11 percent. The online poll has Leave 55 percent Remain compared to Leave 45 percent.

A British member of parliament, Jo Cox, was shot dead on last Thursday, resulting in the suspension of campaigning for this week’s referendum on the country's EU membership. Cox was one of the members of parliament advocating continued British membership.

The crude oil prices jumped more than 1 percent due to weaker US dollar and easing fears of a UK exit from the European Union. The International benchmark Brent futures rose 1.97 percent to $50.13 and West Texas Intermediate (WTI) climbed 1.63 percent to $48.76 by 09:00 GMT.

Meanwhile, the FTSE 100 trading up 2.69 percent at 6,183 by 10:00 GMT.


Source link  
Gold faces strong support at $1359

Major intraday support -$1359. The yellow metal has declined till $1359 yesterday and slightly recovered from that level. It is currently trading around $1367.19. The Intraday trend is slightly bullish as long as support $1359 holds...

Brexit sees rising risk of foreign portfolio outflows

Markets deeply shocked and hit by the Brexit news and gave up risky assets in wake of increased uncertainty on UK’s economic prospects sans EU membership...

US vols lowest since 2012 trade

The bullish momentum of the last three weeks culminated in the lowest 10y yield since August 2012 (in the context of QE) on a more-dovish-than-expected Fed and a pick-up in momentum for the Brexit camp...


Oil price decline likely to bring US inflation

Inflation expectation is the United States as measured by 5year-5 year (5y-5y) forward inflation expectation rate is reaching for the bottom it made in February. The forward inflation expectations dropped to 1.42 percent in February, before bouncing back to 1.83 percent in late April...

Silver hits fresh 6 week high at $17.85

We prefer to take long position in XAG/USD only above $17.84 with stop loss at $17.68 and target of $17.99/18.18/ $18.45 levels...

Eurozone Q1 GDP revised upwards

Euro zone first quarter gross domestic product has been revised upward, beating market's expectation of no change in the revision statistics. Optimism seems to emanate from a buoyant environment of consumer spending at the start of 2016, emerging from a weak Euro and still declining crude oil prices...


UK gilts gain on weak risk appetite

The UK gilts strengthened on Wednesday as Brexit fears and global growth angst continue to weigh on the markets. The yield on the benchmark 10-year bonds, which moves inversely to its price fell 3 basis points to 1.405 percent...

Sharp drop in German retail sales

Germany April retail sales fell for the second consecutive month in a row, taking markets by surprise despite upbeat labor market and buoyant consumer sentiment. This is a clear indication for a slowing consumer momentum in the coming months...

Indian bonds rise modestly

The Indian government bonds traded modestly firmer on Friday as rupee continued to appreciate against the USD. Moreover, investors were also cautious ahead of bonds auction later in the session...

  


Share: