UK gilts remain lower on caution ahead of BoE policy decision

The UK gilts traded tad lower Thursday ahead of the Bank of England’s (BoE) monetary policy decision, scheduled to be unveiled today by 11:00GMT, besides, the meeting minutes, which will add direction to the country’s debt market.

The yield on the benchmark 10-year gilts slightly rose to 1.15 percent, the super-long 30-year bond yields hovered around 1.79 percent and the yield on the short-term 2-year traded nearly 1 basis point higher at 0.29 percent by 09:50 GMT.

The BoE is scheduled to publish today the decision of the MPC meeting ending on September 20th.  In spite of mounting inflationary pressures, the Central Bank is expected to decide unchanged monetary policy amid further signs of a slowdown in UK economic activity with 2 members of the 9-seat Committee, Michael Saunders, and Ian McCafferty, breaking ranges once again and casting a vote in favor of a 25bps rate hike.

Also, major currency peers remained within recent ranges while Bund yields moved further higher to fresh multi-week highs, in line with UK Gilts, as higher than expected UK inflation data released earlier this week continued to have an impact.

Meanwhile, the FTSE 100 traded 0.11 percent higher at 7,387.75 by 09:55 GMT, while at 09:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at 34.01 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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