Financial Markets Review by Lloyds TSB

The first ‘failed’ UK bond auction for seven years dented sterling and pushed gilt yields higher as investors worried about the UK’s large financing requirement.

Failed UK bond auction alarms investors

The first ‘failed’ UK bond auction for seven years dented sterling and pushed gilt yields higher as investors worried about the UK’s large financing requirement.

Weak UK economic data also weighed on the pound this week.

The dollar benefited this week from confidence behind the latest government proposals to support the US banking sector.

The euro weakened on rising speculation that the ECB will cut interest rates next week.

The DMO appeared to partly blame the Bank of England for pushing gilt yields too low.

Full Report