U.K. Bond Yield Curve on ‘Fire’ After May Delays Brexit Vote
- Thirty-year yield falls most since Brexit vote in 2016
- Money markets push back pricing for BOE rate hike to 4Q 2020
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Investors sought the safety of longer-dated U.K. bonds after Prime Minister Theresa May stepped up preparations for no Brexit deal.
The nation’s 30-year debt rallied more than shorter maturities, sparking a flattening of the yield curve, after May’s delay of a vote on her Brexit deal stoked concern the U.K. may tumble out of the European Union. There’s potential for the spread between two- and 10-year yields to invert within six weeks, said Peter Chatwell, the head of European rates strategy at Mizuho International Plc, reflecting the economic risks of no deal.