U.K. bonds rallied on Monday as former Chancellor of the Exchequer Rishi Sunak won the Conservative leadership contest, making him the next prime minister.
The yield on the 10-year gilt TMBMKGB-10Y, 3.826% fell 23 basis points to 3.82%, and the yield on the 30-year gilt TMBMKGB-30Y, 3.893% dropped 18 basis points to 3.88%. Yields move in the opposite direction to prices.
The 2-year gilt TMBMKGB-02Y, 3.433% tumbled 25 basis points to 3.42%.
The pound GBPUSD, -0.13% traded hands at $1.1287, from as low as $1.1061 on Friday.
On Sunday, former Prime Minister Boris Johnson withdrew, and just minutes ahead of a key deadline, Leader of the Commons Penny Mordaunt withdrew as well.
Sunak, who was the chancellor under Johnson, has been backed by lawmakers including the current chancellor, Jeremy Hunt, making it likely Hunt will present a fiscal plan and independent budget assessment on Oct. 31.