LONDON: Gilts fell to their lowest in nearly a month on Wednesday after Moody's affirmed Spain's credit rating, removing one risk that has hung over European stocks and other assets seen as higher risk over the past month.
There had been widespread fears that the agency would cut Spain's rating to junk, a move that would likely have provoked a move into perceived safer assets like gilts and German government bonds.
At 0750 GMT, the December gilt future was 25 ticks lower at 119.25, having hit a near-one-month low of 119.00 earlier and moving in line with the equivalent Bund future.
Investors are eagerly awaiting the minutes from the Bank of England's October policy meeting and unemployment data, both due at 0830 GMT.
Any sign that the central bank is ready to add to its quantitative easing programme of bond-buying in November would be supportive of the gilt market.
"Our economists expect the minutes to point to further QE in November while the claimant change can be prove more interesting," Lloyds strategists added.
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