FX.co ★ UK 10-Year Gilt Yield Eases on Monday

The yield on the UK's 10-year government bonds decreased to 4.7% following a temporary rise, as investor anxiety eased somewhat after the United States announced a temporary reprieve from tariffs on crucial technology imports. The markets experienced volatility due to President Trump’s comprehensive tariff measures, which had driven yields up by nearly 30 basis points the previous week. However, market sentiment improved after U.S. officials confirmed that smartphones, computers, and other electronics would temporarily be exempt from the most severe tariff measures. Despite this relief, there remains an air of uncertainty with the possibility of new tech-related tariffs on the horizon as hinted by Trump. Concurrently, traders are budgeting for 75 basis points worth of interest rate cuts by the Bank of England within the year. The Bank's Megan Greene noted that the effect of tariffs on UK inflation is still unclear, with currency fluctuations adding further complexity to the issue. Additionally, the Office for National Statistics (ONS) is scheduled to release this week's employment and inflation report, which will be closely monitored by market participants.