Key insights
- UK gilts rallied as Starmer pledged to remain Labour leader despite local election losses. German and Italian yields also saw slight decreases. While seemingly localized, political uncertainty in major economies can indirectly influence global risk sentiment and capital flows, potentially impacting US equities, albeit mildly in this instance.
Investing.com -- UK government bonds rallied on Friday, with 10-year gilt yields falling 5 basis points to 4.90%, after Prime Minister Keir Starmer pledged to continue as Labour leader despite significant losses for the party in local elections.
The Labour Party suffered steep losses in UK local elections, with additional results expected over the weekend that could potentially lead to a challenge to Starmer’s leadership.
German bunds showed little movement, with 10-year yields holding steady at 3.00% and futures declining 11 ticks to 125.72. Bunds fluctuated between gains and losses during the session as investors navigated uncertainty surrounding the ceasefire between the US and Iran.
Italian 10-year yields decreased 2 basis points to 3.72%, narrowing the spread over German bunds by 2 basis points to 72 basis points. French 10-year yields fell 1 basis point to 3.62%.
No major bond auctions are scheduled for Monday.
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