UK gilts jump on worsening investor sentiments following possibilities of 'no-deal' Brexit

The UK gilts jumped as investors flocked into safe-haven instruments, following growing possibilities of a 'no-deal' Brexit, although recently some optimism had spiked up as the negotiations moved to the second phase.

The yield on the benchmark 10-year gilts, slumped 2-1/2 basis points to 1.26 percent, the super-long 30-year bond yields plunged 2 basis points to 1.80 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points lower at 0.53 percent by 09:30GMT.

According to a recent report from Bloomberg, Leaving the European Union without a deal in 2019 could cost Britain almost half a million jobs, a report found as London’s key finance industry vacancies also plummeted the most in three years.

The report was commissioned by Cambridge Econometrics by London Mayor Sadiq Khan and it noted that In the worst-case scenario in the Cambridge study, Prime Minister Theresa May would fail to secure a two-year transition to ease the passage for businesses, a situation that in London alone may create 87,000 fewer jobs and usher in 10 years of lower growth.

Later this morning, the BoE will release its Credit Conditions Survey for Q4 2017. The survey released three months ago suggested that lenders were reducing the availability of unsecured credit, most likely in response to BoE concerns that this category of lending might pose risks to bank balance sheets. And although last week’s lending figures reported that growth in this sector eased in November to the slowest in almost two years, it still remained above 9.0 percent y/y. So, today’s survey data might well signal that lenders are taking further measures to curb growth in this sector.

Meanwhile, the FTSE 100 traded 0.30 percent higher at 7,720.00 by 09:35 GMT. Lastly, FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest