LONDON: UK gilt futures extended losses by more than 15 ticks after the sale of 3.25 billion pounds of 5 percent 2025 gilts on Wednesday attracted a very low bid-to-cover ratio of 1.25.
Before the news the June gilt future was at 119.74, and it hit a session low of 119.49, down 32 ticks on the day, shortly afterwards at 0944 GMT.
Ten-year gilt yields were 2.5 basis points up at 3.446 percent.
"If you look at the cover, it was the lowest for a long time and the tail was over a basis point. Looking at those two things, that's an indication that there wasn't massive demand at the auction," said J.P. Morgan strategist Francis Diamond.
"The auction reflects the fact that yields were too low, rather than any issue with that bond in particular. It's just that the market wasn't at the right level," he added.
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