UK gilts continue to fall post February unemployment rate, BoE Governor Carney’s speech

The UK gilts continued to fall Wednesday after reading the country’s unemployment report, for the month of February.

The yield on the benchmark 10-year gilts, which moves inversely to its price, rose 1 basis point to 1.05 percent, the super-long 30-year bond yields also jumped over 1 basis point to 1.66 percent while the yield on the short-term 3-year traded 1/2 basis point higher at 0.19 percent by 09:10 GMT.

UK’s labour market figures for the three months to February showed that the labour market remains tight with the unemployment rate as expected sticking at its cyclical low of 4.7 percent. However, a sharper-than-expected slowdown in employment growth is yet another hint that economic activity may be decelerating.

The unemployment rate matched the lows seen since the 1970s. So far, however, the seemingly tight labour market appears to be having little upward pressure on wages.

Employment growth in the three months to February at 39k was well below expectations and significantly down from the growth rate in the three months to January of 92K. The slowdown chimes with the weakening of labour demand reported in some recent business surveys, although an alternative explanation is that the slowdown is a reflection of growing labour shortages.

Meanwhile, the FTSE 100 rose 0.11 percent or 7.75 points to 7,373.25 by 11:10 GMT, while at 11:00GMT, the FxWirePro's Hourly Pound Strength Index remained slightly bullish at 82.67 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex