Gilts Surge on Lower Oil and Gas Prices After US-Iran Ceasefire

UK government bonds jumped after the US and Iran agreed to a two-week ceasefire in exchange for Tehran reopening the Strait of Hormuz, triggering a sharp drop in energy prices.

Yields on 10-year gilts fell as much as 21 basis points, with the two-year rate falling by a similar margin. Traders reduced bets on interest-rate hikes from the Bank of England, with swaps implying around 35 basis points of monetary tightening by year-end compared to 60 basis points on Tuesday.