Translation of "Uk gilts" in German

The Bank of England is buying UK government bonds (“gilts”).

UK assets – Winter in Wonderland: UK gilts and breakeven rates, as well as sterling, have had a Winter in Wonderland-like roller-coaster ride in December that has left them barely where they were: back to square one.

Given the fall in yields in developed bond markets, it is unsurprising to see long duration assets like UK index-linked gilts and government bonds performing very well.

Looking at the yield differential between two-year UK gilts and US Treasuries, the former is trading at a 16bp premium and has been positive since the beginning of August.

UK gilts and inflation-linked debt were among the top performers over the past five trading days, up 0.8% and 2.3%, respectively, after Chancellor Hammond proclaimed the end of austerity in his Budget speech on Monday.

RPI, the measure on which existing UK index-linked gilts pay interest, does include a measure of housing cost (via a “depreciation” element and mortgage interest payments).

Remembering that UK index linked gilts are priced from RPI rather than CPI, and that estimates are that the long term “wedge” between the two measures is somewhere around 1.1% over the medium term (it could be higher in a rate rising environment as RPI contains a big chunk of mortgage interest payments).

The UK gilts index – with an average duration of over 9 years – has been the most negatively hit, followed by US Treasuries (5+ years duration) and finally by less volatile German bunds (6+ years).

The market’s fears of permanent recession are diminishing as reflected in the current bear market for UK gilts.

In the United States, United Kingdom, Eurozone and Japan, it is a « recoveryless recovery » we must expect, i.e. a pure invention aimed at convincing US and UK insolvent consumers to start buying again and keeping US T-Bonds’ and UK Gilts’ country purchasers waiting as long as possible (until they decide that there is really no future selling their products to the lands of the US Dollar and British Pound.

Only traditionally stable assets such as German bunds and Swiss government bonds delivered positive returns over the past five trading days, and so did UK gilts, whose yields dropped but for other reasons: September inflation disappointed and the country faces daily media speculation about a disorderly departure from the EU and over the future of Prime Minister Theresa May (more below).

EIB GBP bonds typically offer a yield in excess of the UK Gilt.

The uncertainty may keep a lid on UK gilt yields, which have sharply risen over the past month, with the 10-year yield trading at 1.59%, up from 1.27% barely one month ago.

Before moving to the multi strategy fixed income team in July 2015 Orla spent two years at Aviva Investors managing developed sovereign debt portfolios, focusing on the UK Gilt and inflation linked market.

Similarly, the market’s forecast for ten-year UK gilt yields in 2020 was 1.6 per cent, compared to our assumption of 5.5 per cent for the equivalent UK All Property yield.

The EU referendum propelled the UK gilt market to the top of the table as compared to -1.5% in 2015, with index-linked and conventional gilts returning +20% and +10% respectively in 2016.