UK government bonds advanced, with the 10-year yield experiencing its largest intraday range since May, as Brent crude oil gave back earlier gains after touching $90 per barrel. The yield curve steepened in a bull-flattening move.

The yield on the 10-year UK gilt dropped as much as 5 basis points to 4.94%, representing a cumulative decline of 11 basis points from an earlier session high of 5.05%. German bunds also posted gains, with the 10-year yield falling 3 basis points to 3.15%, a total retreat of 6 basis points from its intraday peak.

Traders have scaled back their expectations for rate hikes. The market now prices in a cumulative 26 basis points of tightening by the Bank of England through the end of December, while the European Central Bank is expected to deliver a total of 38 basis points of rate increases over the same period.