Investor Demand: Yields and Investor Nervousness

investor demand: That, plus foreign investor demand for an extra premium for buying gilts, was driving up yields, analysts said, according to The Guardian. Though German Bund and US Treasury yields have also been rising in recent days, the fact that gilt yields have risen at a faster pace reflects investor nervousness. Sterling near 20% plunge since the vote to leave the European Union has sent inflation expectations soaring, driving investors to wind back bets on further interest rate cuts and other Bank of England stimulus measures this year. The benchmark 10-year gilt yield was at 1.13% by 1600 GMT, up around 3 basis points on the day, having risen to 1.22% earlier on Monday nervousness. At the moment, rather than higher yields driving sterling, you had a weaker pound driving higher inflation expectations, in turn driving a steeper and higher UK rates curve. There been a shift in dynamic since the start of October that very unusual for a G10 currency, particularly for sterling, where higher yields are corresponding with a weaker currency, said BNP Paribas currency strategist Sam Lynton-Brown. (news.financializer.com). As reported in the news.