• Selling in fixed income is the focus to start the week

• U.S. yields up 9-12bps across the curve post-Moody downgrade

• Gilt yields also moving to more worrisome levels for GBP

• UK 10yr yield = 4.72%. Danger zone = 4.8-4.92%

• Above here could prompt traders to lean against sterling

• However, cable is bid - largely a function of dollar weakness

• EUR/GBP holds support at 0.84, risks lean to the upside

• Further rise in gilt yields will only raise that risk
UK 10yr yield

(Justin McQueen is a Reuters market analyst. The views expressed are his own.)