LONDON: British gilt futures rose early on Monday in line with Bunds as the euro zone crisis kept risk appetite subdued, with gilt buybacks under the Bank of England's stimulus programme providing additional support.
At 0748 GMT the September gilt future was 29 ticks up at 121.26. The equivalent Bund contract was 21 ticks higher.
"Gilts remain one of the few places outside of the euro zone investors are willing to place their money," said Brian Barry, fixed-income analyst at Investec.
That appeal and the BoE purchases are "a double force combining to push yields lower."
He added that any market moves were likely to be exacerbated by thin trading volumes as the holiday season gets under way.
Yields on 10-year gilts were down 4 basis points at 1.515 percent, with the spread against the equivalent Bund narrowing by 1 basis point to 28 basis points.
Gilts due in seven years were the best performers on the curve, underpinned by a BoE buyback of three to seven-year gilts due later this session.
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