Menu

Search

  |   Commentary

Menu

  |   Commentary

Search

UK gilts slump on higher risk appetite, investors eye ECB policy decision

The UK gilts slumped Thursday as investors moved away from safe-haven buying amid gains in crude oil prices and the recovery in the equities market. Also, investors await the European Central Bank (ECB) monetary policy decision later in the day.

The yield on the benchmark 10-year gilts, which moves inversely to its price, rose 2-1/2 basis points to 1.38 percent, the super-long 40-year bond yield climbed 3 basis points to 1.85 percent and the yield on short-term 2-year bounced 1-1/2 basis points to 0.12 percent by 10:20 GMT.

Today's ECB meeting will be decisive, and in particular whether or not its QE programme is extended at the current 80 billion Euros a month pace for another six months. That is the general expectation but the risks are all on the side of a disappointment – i.e. either a tapering, a signal of a reduction of bond purchases in future, or a lack of any specific extension.

Moreover, crude oil prices rose ahead of OPEC and non-OPEC meeting on Saturday. The International benchmark Brent futures climbed 0.75 percent to $53.39 and West Texas Intermediate (WTI) jumped 0.54 percent to $50.04 by 10:20 GMT.

Meanwhile, the FTSE 100 recovered its previous losses, trading flat at 6,900 by 10:20 GMT. While at 10:00 GMT, the FxWirePro's Hourly GBP Strength Index remained slightly bearish for second straight day at -88.08 (lower than -75 represents purely bearish trend).

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.