UK gilts flat ahead of BoE monetary policy meeting, Governor Carney’s speech

The United Kingdom’s gilts remained flat during European trading hours Tuesday ahead of the Bank of England’s (BoE) monetary policy meeting, scheduled to be held on January 30 by 12:00GMT, followed by Governor Mark Carney’s speech, due to be delivered by 12:30GMT on the same day.

The yield on the benchmark 10-year gilts, hovered around 0.502 percent, the 30-year yield remained flat at 1.006 percent and the yield on the short-term 2-year too traded steady at 0.399 percent by 11:05GMT.

Risk markets have stabilised a little, after this week’s weak open due to coronavirus worries. Headlines, in this regard, will continue to dominate near-term price action and for now we have little evidence that the “risk-off” phase is turning, despite a number of technical support levels holding across the asset classes, Lloyds Bank reported.

Data wise, today’s CBI retail survey for January will provide an update on UK retail spending before Thursday’s BoE meeting. This may garner some interest, but has frequently proved to not be a good predictor of official retail sales, the report added.

After the weakness in December, markets will be looking for any indications of a post-election rebound in the January figures. Overnight, the British Retail Consortium shop price index is expected to show that retail inflation remains subdued, Lloyds Bank further noted in the report.

Meanwhile, the FTSE 100 edged tad 0.18 percent higher to 7,425.25 by 11:10GMT.