UK gilts sink as recent polls show declining support for Brexit

The UK gilts continue to trade lower on Tuesday after new polling data showed ebbing support for “Brexit” at this week’s UK EU membership referendum. The yield on the benchmark 10-year gilts rose 1 basis point to 1.249 percent and the yield on short-term 2-year note climbed nearly 2 basis points to 0.490 percent by 09:25 GMT.

The recent polls in the United Kingdom in run up to the June 23 Brexit referendum indicate that the percentage of citizens in favour of "Remain" the European Union (EU) has outnumbered those who want to "Leave", easing the possibility that Britain might leave the EU after 43 years of membership in the bloc.

According to the NatCen poll results on the United Kingdom referendum campaign, 53 percent would vote to 'Remain' in the European Union, while, 47 percent would vote to 'Leave'. Similarly, the ORB/Daily Telegraph poll results on the United Kingdom referendum campaign, 53 percent would vote to 'Remain' in the European Union, while, 46 percent would vote to 'Leave'.

Moreover, the implied probability of a 'Remain' vote in Thursday's EU referendum has hardened further, to 78 percent, after jumping to 72 percent earlier in the morning, up from 60 to 67 percent, on Friday, according to the latest odds from bookmaker Betfair. William Hill is higher at 83 percent. This is occurring in tandem with the latest run of polls released at the weekend showing the momentum gradually swinging back in favour of the 'Bremaineers' and indeed the declaration of the UK Times newspaper to back the 'Remain' camp.

In addition, 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.

Markets will remain keen to focus on the first leg of Fed Chair Yellen’s semiannual monetary policy testimony before Congress on Tuesday (before the Senate Banking Committee) and Thursday’s referendum on the United Kingdom’s membership of the European Union. The European Central Bank president Mario Draghi is also due to speak today at 13:00 GMT.

Meanwhile, the FTSE 100 trading down 0.29 percent at 6,185 by 09:25 GMT.