LONDON (Reuters) - HSBC (HSBA.L) said on Tuesday that it had lowered its year-end forecast on 10-year British government bond yields to 0%, given a small probability of negative interest rates and a sense that rates will stay low for a long period.
Britain’s 10-year gilt yield is trading at around 0.32% GB10YT=RR.
“We cut our year-end 10-year yield forecast to 0% from 20 bps previously,” HSBC analysts said in a note.
“Our low yield bias captures the greater weight we place on the likelihood that Bank Rate stays low for a prolonged period, as well as the increased possibility of negative rates.”
Reporting by Dhara Ranasinghe, Editing by Lawrence White