FX.co ★ UK 10-Year Gilt Yields Rebound Amid Global Turmoil

The UK 10-year gilt yield ascended to 4.48%, recovering from a recent low of 4.324% on January 14. This shift comes as investors evaluate new UK labor market data amidst escalating geopolitical tensions and a marked downturn in Japanese bonds. The UK unemployment rate remained stable at 5.1% for the three months leading to November, hovering near pandemic-era peaks and marginally above forecasts of 5%. At the same time, annual wage growth, excluding bonuses, decelerated to 4.5%, marking its slowest rate since April 2022. On the global stage, investor sentiment was further influenced by statements from US President Donald Trump. He suggested that Europe might not oppose vigorously against new plans, while cautioning that additional tariffs could be imposed on eight European nations unless the US is granted permission to acquire Greenland. Further unpredictability arose from turmoil in the Japanese government bond market, triggered by Prime Minister Sanae Takaichi's announcement of surprise elections, which undermined confidence in Japan's fiscal trajectory.