U.K. government bonds rose, with 10-year yields falling the most in five weeks, as deepening tensions in Ukraine and reports of Russian fighter planes being put on combat alert boosted demand for haven assets.
The 10-year gilt climbed with European securities, pushing the yield to the lowest in three weeks, as Interfax news agency reported Russia had readied jets near its western border as part of military exercises announced yesterday. The pound reached a one-week high versus the euro as Bank of England Chief Economist Spencer Dale said interest-rate increases will be gradual and remain below pre-crisis levels “for some time to come.”
“The situation in Ukraine is causing risk aversion,” said Richard Kelly, senior strategist at Toronto-Dominion Bank in London. “It’s a key factor that’s driving demand for safe-haven assets including gilts.”
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