something interesting

<  BACK TO Market Analysis

PIG TODAY-Foreigners sell UK bonds but probably not due to Brexit concerns - analysts

Foreign investors sold British government bonds in January at the fastest pace in nearly three years, probably reflecting how funds are adjusting gilt holdings after a buying spree late last year rather than nerves about Brexit, analysts said.

Overseas investors sold a net 7.59 billion pounds of gilts in January, the biggest monthly drop since March 2014 and following on from 2.97 billion pounds of sales in December, Bank of England data showed on Wednesday.

The central bank is watching closely for signs that foreign investors - responsible for plugging Britain's big current account deficit - are starting to shy away from British assets as the process of leaving the European Union gets underway.

January's outflow scythed the rolling three-month total purchases from foreign investors down to 5 billion pounds. Two months ago that measure stood at 39.43 billion pounds, the highest since BoE records began in 1986.

Overseas central banks and sovereign wealth funds devoured gilts late last year to top up sterling portfolios battered in dollar terms by the pound's post-Brexit vote plunge, and January's sell-off was likely linked to sterling's 2 percent rise against the dollar during the month.

"There is often a correlation between what overseas investors do with gilts and what sterling is doing," said John Wraith, UK economist and fixed income strategist at UBS.

Furthermore, January's sell-off probably also reflected redemptions of 29 billion pounds of the 1.75 percent gilt that matured on Jan. 22, much of which will have flowed overseas.

"In months where you have a maturity of a bond, its not unusual to see a net outflow," said Sam Hill, an economist at RBC.

"It would make sense to wait until next month to see if there is a reinvestment of the proceeds to cancel it out. It would be premature to pin the net outflow on any Brexit-related factors."

Analysts said they will watch for any further deterioration that might yet suggest nervousness about Brexit among overseas investors.

Britain's current account deficit is 5.9 percent of gross domestic product, meaning Britain relies on "the kindness of strangers", in the words of BoE governor Mark Carney, to balance its books. "It's going to be interesting," said Jason Simpson, fixed income strategist at Societe Generale.

"Political worries in Europe could see flows out of French bonds and into U.S. Treasuries and gilts. But if we see a run of negative numbers then maybe that would be a sign that overseas investors are steering clear of the UK for the obvious Brexit reasons."

Source: reuters.com

Foreign investors sold British government bonds in January at the fastest pace in nearly three years, probably reflecting how funds are adjusting gilt holdings after a buying spree late last year rather than nerves about Brexit, analysts said.

Overseas investors sold a net 7.59 billion pounds of gilts in January, the biggest monthly drop since March 2014 and following on from 2.97 billion pounds of sales in December, Bank of England data showed on Wednesday.

The central bank is watching closely for signs that foreign investors - responsible for plugging Britain's big current account deficit - are starting to shy away from British assets as the process of leaving the European Union gets underway.

January's outflow scythed the rolling three-month total purchases from foreign investors down to 5 billion pounds. Two months ago that measure stood at 39.43 billion pounds, the highest since BoE records began in 1986.

Overseas central banks and sovereign wealth funds devoured gilts late last year to top up sterling portfolios battered in dollar terms by the pound's post-Brexit vote plunge, and January's sell-off was likely linked to sterling's 2 percent rise against the dollar during the month.

"There is often a correlation between what overseas investors do with gilts and what sterling is doing," said John Wraith, UK economist and fixed income strategist at UBS.

Furthermore, January's sell-off probably also reflected redemptions of 29 billion pounds of the 1.75 percent gilt that matured on Jan. 22, much of which will have flowed overseas.

"In months where you have a maturity of a bond, its not unusual to see a net outflow," said Sam Hill, an economist at RBC.

"It would make sense to wait until next month to see if there is a reinvestment of the proceeds to cancel it out. It would be premature to pin the net outflow on any Brexit-related factors."

Analysts said they will watch for any further deterioration that might yet suggest nervousness about Brexit among overseas investors.

Britain's current account deficit is 5.9 percent of gross domestic product, meaning Britain relies on "the kindness of strangers", in the words of BoE governor Mark Carney, to balance its books. "It's going to be interesting," said Jason Simpson, fixed income strategist at Societe Generale.

"Political worries in Europe could see flows out of French bonds and into U.S. Treasuries and gilts. But if we see a run of negative numbers then maybe that would be a sign that overseas investors are steering clear of the UK for the obvious Brexit reasons."

Source: reuters.com

lastest Articles

Quips of Wisdom
Forex Trading Wisdom: Move the market
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Forex Today: Yen weaker amid US-China trade optimism, UK retail sales – Up next
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (17.01.2019)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Going Broke
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - 17.01.2019
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (16.01.2019)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: The fool
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
UK: On course for a hard Brexit?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (15.01.2019)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY-16.01.2019
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
British pound volatile as Brexit-vote day arrives
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom:- Perfection
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
PAMM News
Managed Forex Accounts Daily Results (14.01.2019)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (14.01.2019)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY- 14.01.2019
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Fed’s Dovishness Confirmed – Focus Shifts to Brexit and Earning Season
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Investing
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
USD/JPY - Fed Will Put Over-Valued USD/JPY In The Cross Hairs
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (10.01.2019)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Do what you love
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
FOMC: Caution in mind
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (09.01.2019)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: The goal
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY -09.01.2019
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (08.01.2019)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Opportunities...
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - 08.01.2018
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (07.01.2019)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Markets Rise After Strong US Jobs Growth with Fed Talking Down Rate Hikes
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (03.01.2019)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Accepting losses
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY-03.01.2019
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (02.01.2019)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/JPY recovers large part of daily drop on improved sentiment, trades near 109.50
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: The Impossible
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - 02.01.2019
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Company News
Happy and Prosperous New Year
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Yearly Results - 2018
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Trade What’s Happening…
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
FX Today: Markets thin as the new year rolls around
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Dollar might face hard times in 2019
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Oil remains bid after inventories post small decline
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Never let a win go to your head, or a loss to your heart
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
EUR/USD eases from weekly tops, still well bid around mid-1.1400s ahead of German CPI
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Dollar slides versus haven currencies as equities renew selling
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Good Trading
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Fed projections are the problem
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom:The market is a device for transferring money from the impatient to the patient
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Japan’s Nikkei tumbles into a bear market after Wall Street’s latest slide
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Company News
Christmas And New Year Trading Schedule
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Take your profits
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Forex Today: Risk sentiment sees markets drifting mildly higher in the pre-Christmas wind-down
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Weekly Results
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Volatility and Risk Aversion Continue to Dominate December
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (20.12.2018)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Company News
ONDA PAMM - Very Promising PAMM...Could it Be?!
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (18.12.2018)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Cloudy Skies Remain For AUD/USD Into The Fed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold retreats after being unable to break above $1250
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (17.12.2018)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD May Struggle To Rally On Any Fed Dovishness
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD extends the bounce towards 1.1350
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Weekly Results
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Dollar Higher Ahead of Crucial Fed Meeting
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Control
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - 14.12.2018
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Risk Control
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
PAMM News
Managed Forex Accounts Daily Results (13.12.2018)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Currencies struggle for direction despite Draghi and Trump comments
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY -13.12.2018
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (12.12.2018)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Company News
USD Bank Wire Notice
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
ECB will say goodbye to quantitative easing, but when will it hike rates?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom:Knowing Your Self
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY- 12.12.2018
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (11.12.2018)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Personalizing Loses
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY-11.12.2018
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (10.12.2018)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY- 10.12.2018
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Amateurs vs Professionals
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Forex Today: Risk-off extends into Asia, UK monthly GDP – key focus
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Company News
BREXIT - Margin Requirement
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: The Game
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Gold retreats from 5-week tops amid a modest USD rebound
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (04.12.2018)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Company News
US National Mourning day Trading Schedule
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY- 04.12.2018
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Keep it Simple
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Breaking: GBP/USD jumps on ECJ opinion that the UK can revoke Article 50 unilaterally
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (03.12.2018)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD fails to preserve gains, calms down below mid-1.27s
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: Your Friend
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY- 03.12.2018
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Weekly Results
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Dollar Looking for Economic Guidance Ahead of Busy Week
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Wisdom: You are what you do
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
FOMC to press on with hikes, cautiously
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (29.11.2018)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
US Dollar Tests Trend-Line Support Ahead of FOMC Minutes
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613