U.K. 30-year gilts fell for a second day after central banks worldwide lowered the cost of dollar funding, boosting optimism leaders will craft a solution to Europe’s sovereign-debt crisis. Ten-year gilts slid before the Debt Management Office sells 3 billion pounds ($4.7 billion) of gilts maturing in September 2021. Six central banks led by the Federal Reserve yesterday agreed to cut the cost of providing dollar funding via swap agreements and to make other currencies available as needed. Sterling dropped versus the dollar and yen before a report that is forecast to show U.K. manufacturing shrank further last month. “Gilt yields rose today as risk sentiment appears to have improved after the coordinated action by the central banks,� said Jamie Searle, an interest-rate strategist at Citigroup Global Markets Ltd. in London. “Gilts have done really well this year because of their safe-haven status.� The 30-year yield climbed six basis points, or 0.06 percentage point, to 3.20 percent at 9:02 a.m. London time. The 4.25 percent security due December 2040 fell 1.210, or 1.21 pounds per 1,000-pound face amount, to 119.825. Ten-year rates were three basis points higher at 2.34 percent. A U.K. manufacturing index dropped to 47 last month from 47.4 in October, a 28-month low, according to the median forecast of 26 economists in a Bloomberg News survey. The pound weakened 0.4 percent to $1.5682 and depreciated 0.2 percent to 85.78 pence against the euro. Gilts have returned 15 percent this year, while German debt gained 6.5 percent and U.S. Treasuries rose 9 percent, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. To contact the reporters on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net; To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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