LONDON, Sept 18 (Reuters) - British interest futures dipped on Thursday after the world's major central banks pumped billions of dollars into the financial system in an effort to ease a credit crisis that has dragged on for more than a year.
There was some speculation on trading floors that co-ordinated interest rate cuts could also be on the cards, but analysts said such a move looked unlikely for now.
'Central banks, quite correctly in our view, are currently tackling the issues through pumping liquidity into markets and by dealing with problems on an institution by institution basis,' said Philip Shaw, an economist at Investec.
'Looking ahead, we would be reluctant to rule out internationally co-ordinated cuts in rates if things get much worse -- it's just that events, fortunately, have not reached that point yet.'
British bank Lloyds TSB secured a $22 billion rescue takeover of rival HBOS on Thursday, soothing concerns over the latter which is Britain's biggest mortgage lender.
Even though worries over the credit crunch and its impact on the financial sector persisted, the takeover deal improved confidence among investors. The FTSE 100 index of leading shares rose 2 percent.
The Debt Management Office said it had created a further 670 million pounds of 4 percent 2009 Treasury stock under its standing repo facility.
At 1112 GMT, the short sterling strip was trading between 1 and 6 ticks lower. The December gilt future was 14 ticks lower at 112.40.
Yields on two-year gilts were 7 basis points lower at 4.13 percent. Yields on ten-year paper were 3 basis points higher at 4.43 percent.
* Dec gilt 112.40 (-0.14)
* Dec short sterling 94.125 (-0.01)
* 10-year yield 4.43 percent (+3 bps) --------------------- KEY MARKET DATA--------------------------- Long Gilt futures Gilt benchmark chain Short Stg futures Cash market quotes Deposit rates Sterling cross rates UK debt speedguide Econ. indicator polls --------------------KEY MARKET REPORTS-------------------------- Gilts Sterling Euro Debt Dollar U.S. Treasuries Debt reports -------------------- GILT STRIPS DATA -------------------------- Gilt strips data All gilt strips Gilt strips IO Gilt strips PO A list of all the strippable British gilts --------------------- FOR MORE NEWS ---------------------------- Top British news World news UK diary Press reviews New from Reuters Useful Speedguides Keywords: MARKETS BRITAIN GILTS tf.TFN-Europe_newsdesk@thomson.com vjt COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
There was some speculation on trading floors that co-ordinated interest rate cuts could also be on the cards, but analysts said such a move looked unlikely for now.
'Central banks, quite correctly in our view, are currently tackling the issues through pumping liquidity into markets and by dealing with problems on an institution by institution basis,' said Philip Shaw, an economist at Investec.
'Looking ahead, we would be reluctant to rule out internationally co-ordinated cuts in rates if things get much worse -- it's just that events, fortunately, have not reached that point yet.'
British bank Lloyds TSB secured a $22 billion rescue takeover of rival HBOS on Thursday, soothing concerns over the latter which is Britain's biggest mortgage lender.
Even though worries over the credit crunch and its impact on the financial sector persisted, the takeover deal improved confidence among investors. The FTSE 100 index of leading shares rose 2 percent.
The Debt Management Office said it had created a further 670 million pounds of 4 percent 2009 Treasury stock under its standing repo facility.
At 1112 GMT, the short sterling strip was trading between 1 and 6 ticks lower. The December gilt future was 14 ticks lower at 112.40.
Yields on two-year gilts were 7 basis points lower at 4.13 percent. Yields on ten-year paper were 3 basis points higher at 4.43 percent.
* Dec gilt 112.40 (-0.14)
* Dec short sterling 94.125 (-0.01)
* 10-year yield 4.43 percent (+3 bps) --------------------- KEY MARKET DATA--------------------------- Long Gilt futures Gilt benchmark chain Short Stg futures Cash market quotes Deposit rates Sterling cross rates UK debt speedguide Econ. indicator polls --------------------KEY MARKET REPORTS-------------------------- Gilts Sterling Euro Debt Dollar U.S. Treasuries Debt reports -------------------- GILT STRIPS DATA -------------------------- Gilt strips data All gilt strips Gilt strips IO Gilt strips PO A list of all the strippable British gilts --------------------- FOR MORE NEWS ---------------------------- Top British news World news UK diary Press reviews New from Reuters Useful Speedguides Keywords: MARKETS BRITAIN GILTS tf.TFN-Europe_newsdesk@thomson.com vjt COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.