UPDATE 1-UK bond yields fall to two-month low on US-Iran preliminary deal

UK gilt yields fell to two-month lows as a preliminary US-Iran peace deal eased stagflation fears, with oil prices dropping over 5% and investors turning dovish on rate outlooks. Two-year yields fell 8 bps to 4.15% and 10-year yields dropped ~7 bps to 4.77%, while BoE rate futures now price in just 27 bps of tightening by year-end versus nearly 50 bps a week earlier. The deal marks the biggest breakthrough in the conflict that began with joint US-Israeli strikes on Iran in February.