Bonds: Gilts lose safe-haven bid, edge lower

The yield on ten-year Gilts rose by three basis points to 1.49%, erasing the previous session’s Brussels bombings-induced gains as investors sought safety, against a backdrop of hawkish remarks from some members of the US Federal Reserve.

Ten-year US Treasury notes on the other hand edged higher, which saw their yield slip by one basis point to 1.87%.

Acting as a backdrop, the Debt Management Office sold £350m of inflation-linked securities maturing in March 2068 at a real yield of -1.077%.

Bonds on the Eurozone’s periphery also retreated amid ‘hawkish’ Fedspeak.

On Tuesday, remarks from Chicago Fed president Charles Evans were interpreted as him ‘pushing back’ on market expectations for just one interest rate hike by the US central bank in 2016.

In parallel, speaking to Bloomberg TV on Wednesday the president of the Federal Reserve bank of St.Louis, James Bullard, chimed in with recent warnings from other colleagues of his at the Atlanta and San Francisco Fed banks, saying the monetary authority should consider an interest rate hike in April.

Italian 10-year sovereign bonds sagged, pushing their yield up by four basis points to 1.30% by the close of trading in London.

Similarly-dated Spanish government debt also declined, pushing their yields higher by two basis points to 1.53%.

Yields on German 10-year Bunds fell by one basis point to 0.20%.

Earlier in the day, the country’s debt agency auctioned €810m in 30-year bonds at a yield of -0.94%, down from the -0.70% seen at the last sale of 30-year debt in February.