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UK gilts gain in muted trading day amid Brexit worries, global recessionary fears
The United Kingdom’s gilts gained during European trading hours Tuesday, amid a muted session that barely witnessed any data of major economic significance. However, fears of a global economic breakdown and possibilities of a no-deal Brexit worried investors further more, pulling yields lower.
The yield on the benchmark 10-year gilts, suffered 2-1/2 basis points to 0.444 percent, the 30-year yield also lost 2-1/2 basis points to 1.022 percent and the yield on the short-term 2-year too traded nearly 2-1/2 basis points lower at 0.465 percent by 10:20GMT.
Boris Johnson’s letter to EU Council President Tusk yesterday evening set out his government’s new position on Brexit and the Irish border. True to form for the Prime Minister, however, it was not a serious effort, offering no constructive proposals for how both sides might meet the obligations of the Good Friday Agreement and maintain an open border while also taking the UK out of the Single Market and Customs Union, Daiwa Capital Markets reported.
Instead, Johnson merely advocated the long-discredited proposal of “alternative arrangements” to the negotiated backstop, with the lack of any detail reflecting the fact that any workable “alternative arrangements” simply don’t – and might never – exist, the report added.
Meanwhile, the FTSE 100 traded 0.52 percent higher at 7,228.11 by 10:25GMT.