FX.co ★ UK Gilt Yields Fall as Inflation Pressures Ease on US–Iran Deal Hopes

UK 10-year gilt yields reversed early gains to edge back toward 4.8%, their lowest level since April 17, as renewed optimism over a potential US–Iran agreement eased inflation concerns and bolstered fixed-income markets. The rally in UK government bonds has now extended into a seventh consecutive session, the longest winning streak since just before tensions in the Iran conflict escalated in late February. Market sentiment has also been supported by recent domestic data pointing to a cooling labor market, softer-than-expected inflation, and signs of slowing economic activity, leading traders to scale back expectations for a Bank of England rate hike. According to Axios, US and Iranian negotiators have reached a memorandum of understanding intended to extend the ceasefire by 60 days and launch talks on Iran’s nuclear program, though it still requires final approval from US President Donald Trump.