U.S. and U.K. Bond Yields Fall on Cabinet Resignations Over Brexit Deal

Benchmark U.S. Treasury yields followed U.K. yields in the red after key Cabinet officials resigned, putting Britain Prime Minister Theresa May’s Brexit deal in jeopardy.

The benchmark U.K. 10-year Gilt fell to 1.228, while in the U.S., the 10-year note went down to 3.101 and the 30-year note followed, heading lower to 3.353. The two-year note also ticked lower to 2.846, as did the five-year note to 2.926.

The news of the resignations came as May announced she garnered enough Cabinet support to move forward with a Brexit deal on Wednesday, effectively keeping the United Kingdom within the customs union of the European Union (EU) for an indefinite amount of time.

“I firmly believe that the draft withdrawal agreement was the best that could be negotiated,” said May. “The choices before us were difficult,” May added. “But the collective decision by Cabinet was that the government should agree the draft withdrawal agreement and the outlying political declaration.”

“This is a decisive step which enables us to move on and finalize the deal in the days ahead,” May added.

Per a CNBC report, the proposed 500-page deal will include commitments regarding UK citizens’ rights after Brexit takes place and a proposed 21-month transition period after Britain exits the EU on March 2019.

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