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Gilt Yields
StevieJ
Posts: 20,174 Forumite
I notice that gilt yields have been increasing noticeably over the past few days, particularly the much bench-marked 10 year. If this trend (short term I know) is maintained will it spell trouble for the govt ( or more realistically me and you) going forward when attempting to finance future deficits?
'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
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Comments
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Risk on....
Equities rose and peripheral EU yields fell.
Just a sign of increasing market confidence and appetite for risk, money moves out of low yielding "safe haven" hideaways.
Too early to know for sure, but I doubt it's permanent yet. Still too much uncertainty out there and markets will likely swing back to "risk off" a few more times before the recovery embeds properly.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
The UK was in an excellent position for borrowing and now it's only very good - that might make a difference.
I read it's because the US is a better bet for gilts now that they've sorted out their fiscal position - you couldn't make it up.0 -
The UK was in an excellent position for borrowing and now it's only very good - that might make a difference.
I read it's because the US is a better bet for gilts now that they've sorted out their fiscal position - you couldn't make it up.
It's a global thing at the moment US,Japan,UK all up.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
It's a global thing at the moment US,Japan,UK all up.
And many higher risk countries down.
Like I said, risk on....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
These yields are still below inflation, there is some way to go. Might be time to drip feed into gilts if you hare little or no exposure in them.0
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These yields are still below inflation, there is some way to go. Might be time to drip feed into gilts if you hare little or no exposure in them.
Think I'll pass thanks. My investment strategy is to try to avoid intentionally creating capital losses by buying assets which are about to fall in value.0 -
Who knows, maybe Ozzie will have to return the 'interest' on the invented dosh to Mervland to cover the BOE capital losses...0
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I notice that gilt yields have been increasing noticeably over the past few days, particularly the much bench-marked 10 year. If this trend (short term I know) is maintained will it spell trouble for the govt ( or more realistically me and you) going forward when attempting to finance future deficits?
To put things into perspective, yields on 10 year gilts are still only 2.1% or thereabouts which is still very low historically and as you say this is just a short term movement at present.
If Gilt prices fall dramatically then it will cause problems to the UK. That hasn't happened and there is no obvious trigger to cause that.0 -
To put things into perspective, yields on 10 year gilts are still only 2.1% or thereabouts which is still very low historically and as you say this is just a short term movement at present.
If Gilt prices fall dramatically then it will cause problems to the UK. That hasn't happened and there is no obvious trigger to cause that.
No more qe purchases recently.
Gilt yields up.
Coincidence...I think....0 -
The biggest move was Sterling losing about 2% in 2 days. Makes everything foreign a little higher priced in theory but gets confusing quick. It could be sterling fell from bond selling off or who knows
UK is in less trouble then alot of places when it comes to financing. The biggest risk is not being able to (or ala Greece just being squeezed too high) renew the old debt when it expires.
Deficit I think they will have to zero someday tough luck but actual payback is much tougher, I think thats the sword of Damocles
Average maturity for UK is 13 years and USA amazingly is 4 years for 16tn. Maybe their QE has helped lengthen that term into friendly hands, but still I think we arent the worst off0
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