LONDON: British government bond prices fell on Monday, underperforming German Bunds, as investors worried about the decision by London's influential mayor Boris Johnson to back the campaign to take Britain out of the European Union.
March gilt futures opened down about 40 ticks at 121.62, falling more sharply than equivalent futures for German bonds which were down about 17 ticks.
Ten-year gilt yields rose about 2 basis points on the day to 1.439 percent.
Nick Stamenkovic, a bond strategist at RIA Capital Markets, said investors were more nervous about the outcome of the referendum which Prime Minister David Cameron on Saturday set for June 23.
Johnson is one of Britain's most well-known politicians and his announcement on Sunday that he was rebuffing Cameron's push to keep Britain in the EU represented the biggest boost to date for the 'Out' campaign.
"The UK does suffer from a sizeable current account deficit and is heavily dependent on overseas inflows," Stamenkovic said. "If it did vote to leave the EU, the pound would take quite a knock."
Comments
Comments are closed for this article.