A bounce in stock markets, a modest improvement in the British Chamber of Commerce’s quarterly economic survey and a fall in weekly US jobless claims pared back some of the gains by gilts this week.
With long-dated gilts having been squeezed relentlessly higher on demand from pension funds, which have been forced by falling yields to buy more stock, dealers sought an excuse to take profits and found it in yesterday’s rally in the Nikkei, which fed through to Western bourses. With UK and US economic data exerting further downward pressure, the March gilt future fell 56p to £115.01 on turnover in 102,000 lots. Treasury 4¾ per cent 2020 fell 23p to £102.25, with Treasury 6 per cent 2028 down 132p to £132.75. Telefónica dominated new issues with the sale of €5.8 billion of bonds, whose sterling tranches included a £500 million 2026 and £750 million 2018 bond, handled by Barclays, BNP Paribas and Royal Bank of Scotland, and bearing a 538 per cent coupon.