[MARKET UPDATE] Gilts open lower by 113 ticks as markets price in the increasing possibility of Burnham becoming PM

• Opened at 85.70, just above the 85.45 contract low.
• From a yield perspective, the 10yr first looks to 5.11% before the 5.13% peak from the 12th of May, which roughly aligns with levels from July 2008. If surpassed, we have the 2008 peak of 5.26% and 5.57% from 2007. For the 30yr, its YTD peak is 5.81%, and if breached, we look to 5.96% from 1998.

The drop in gilt prices reflects market apprehension surrounding potential political changes, specifically the increasing likelihood of Burnham becoming Prime Minister. This pricing in of political risk may affect investor sentiment, particularly in fixed income markets, where yields could rise further if uncertainty persists.