Gilts and Global Bond Yields Ease as Positive US and UK Data Boost Investor Sentiment

Gilts and Global Bond Yields Ease on Positive Economic Data and Reduced Fiscal Concerns

Gilts, along with their eurozone and US counterparts, experienced a decline in yields following the release of stronger-than-expected US Purchasing Managers' Index (PMI) data on Thursday and upbeat UK retail sales figures on Friday. These positive economic indicators helped ease recent market worries over the potential negative impact of President Trump's tax-cut bill, which had earlier caused a spike in yields.

According to Deutsche Bank Research analysts, firmer US economic data continues to reduce fears of an impending recession, providing support for asset stability and investor confidence. The 10-year UK gilt yield dropped around 3 basis points, last trading at 4.730%, while the 10-year German Bund yield declined by 3 basis points to 2.611%.

The improved data suggests resilience in both the US and UK economies, which has reassured investors and tempered some of the volatility seen in bond markets following the announcement of significant fiscal policy changes. This cautious optimism may help stabilize bond yields in the near term, even as concerns about fiscal deficits and government spending persist.