Long-dated gilt yields reverse lower, cable at the lows

UK yields initially rose on the details of the budget but there has been a re-think in the market, or a ‘buy the fact’ reaction to all the angst about the deficit situation.

My suspicion is that there are still many generals ‘fighting the last war’ in regards to the Liz Truss fiasco, and fearful of a repeat. Today, after rising to 5.41%, 30-year yields have fallen to 5.29% and dragged the pound down.

Now that’s not happening in a vacuum as the euro also hits session lows and I take it as a good sign for the pound in the longer term but right now the market is sorting through the spending implications.

This article was written by Adam Button at www.forexlive.com.