June 13, 2019 / 10:47 AM / a year ago

Franklin Templeton's Zahn buys British gilts as no-deal Brexit risk rises

LONDON, June 13 (Reuters) - Franklin Templeton’s head of European fixed income David Zahn said on Thursday he had bought safe-haven UK government bonds as the chance of a no-deal Brexit rises.

“We feel the chances of a no-deal Brexit are increasing,” he said.

“This is in combination with the European economy not doing well and the chances of a Fed rate cut rising,” he added referring to the U.S. Federal Reserve.

He said he had previously held a short position in British gilts .

Zahn also said he had added “significantly” to positions in 30-year German government bonds because the European economy had not recovered as quickly as anticipated.

While a rate cut from the European Central Bank was unlikely, Zahn said he expected a return to quantitative easing in 2020. (Reporting by Virginia Furness and Dhara Ranasinghe Editing by Tommy Wilkes)

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