LONDON: Ten-year gilt yields hit their highest since July 2011 on Friday, playing catch-up with Treasuries as investors bet faster growth in the UK and the United States would lead to earlier interest rate rises than previously assumed.
A fall in US jobless claims and a rise in retail sales on Thursday prompted a rise in Treasury yields when UK markets were closed. Ten-year gilt yields rose as high as 3.027 percent according to Reuters data, up four basis points on the day.
Nishay Patel, fixed income strategist at Citi, said the break above 3.020 percent - a level tested several times in early September - was significant. "Gilts were just playing catch-up with the rise in Treasury yields early on, but the break on the charts has given some momentum," he said.
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