Wednesday, 04 January 2012 23:11
LONDON: Gilts edged down on Wednesday after trading in a tight range for most of the session as markets were gradually returning to business-as-usual after Christmas and New Year holidays.
British government bonds pared some of their early losses in the wake of a successful auction of five-year gilts, with good cover ratio at a Bank of England buyback supporting the move.
The auction of 3.75 billion pounds of 1.75 percent 2017 gilts drew bids for 2.02 times the amount on offer, well above the weak level of 1.27 achieved nearly three weeks ago when the gilts were sold into a pre-Christmas lull.
The solid auction result helped gilt futures temper losses and even make forays into the black.
"The low of the day was around the auction and we've traded pretty firmly since then. The auction was a decent one," said Moyeen Islam, strategist at Barclays Capital.
Analysts had expected robust demand ...