Gilt yields dip below treasuries as US debt crisis intensifies

Yields on 10-year UK government bonds dipped below those of US treasuries for the first time in two years today as financial markets began to price in a US default.

The 10-year gilt was yielding 2.967% during early trading, while 10-year treasuries were yielding 2.974%, although the trend had reversed by the afternoon. Meanwhile, European markets fell as company earnings disappointed and fears of a US default persisted. The German Dax dropped 1.61%, to trade at 7,136, while the Cac 40 dived 1.25% to 3,688. The FTSE 100 dipped 0.53% to trade at 5,826 by late afternoon. US markets opened slightly higher on hopes the Congress will reach an agreement on the debt ceiling crisis at its meeting tonight. The Dow Jones rose 0.12% to trade at  12,...