Bonding together to move markets

Article Abstract:

Factors affecting UK government securities (gilts) include interest rates, inflation, and foreign bond prices and yields. Other UK bonds tend to move with gilts. Bond markets are affected by expectations of changes in interest rates as well as actual changes. This occurred in late 1994 when interest rates in the US were expected to be reduced. Share markets may be affected by changes in bond markets, and they may move together, but this is not always the case. Share prices may react differently from bond prices in response to some economic data, such as inflation figures.

Capital market, Capital markets

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Linkers' limited fear of low inflation

Article Abstract:

Index-linked UK government securities have not always performed as well as conventional government securities or shares, but they have advantages. They provide protection against unexpected inflation which could be triggered by natural disasters or wars. They do not offer protection against inflation during their last eight months and holders could thus benefit if inflation falls to zero. They also provide security both in terms of real yields and in protecting the value of capital.

Investment analysis, Securities analysis

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It's age that makes the difference

Article Abstract:

Demographic factors affect the demand for government securities (gilts) and equities in the UK. People in their forties and fifties tend to save more. Asset prices may also depend on demographic factors. Younger people also tend to purchase houses rather than financial products and this affects inflation. Yields for gilts are thus affected by demography, as is inflation. The links are not clear cut, however, as empirical evidence for the UK illustrates.

Economic aspects, Demography

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