FX.co ★ UK 10Y Bond Yield at 2-Month Low on Trade War Concerns

The yield on the UK's 10-year government bonds remained stable at 4.45%, marking its lowest point since February 5th. This stability comes amid mounting fears of a decelerating global economy, fueled by increasing trade tensions. On Friday, China announced the imposition of a 34% tariff on all U.S. imports, set to take effect on April 10th. This move is in retaliation against U.S. President Donald Trump's proposal to levy a 10% tariff on all imports, including those from the UK, with notably higher tariffs for some nations, such as an additional 34% charge on Chinese goods. President Trump has also indicated he plans to persist with his extensive tariff policies, leading traders to anticipate further interest rate cuts from the Bank of England. Current market forecasts suggest a reduction of approximately 88 basis points in the BoE's benchmark interest rate by December, an increase from about 43 basis points projected at the end of March. Moreover, the likelihood of a 25-basis-point reduction at the BoE's next policy meeting in May has escalated to approximately 90%.