UK gilts nearly flat in subdued trade, investors eye BoE policy decision

The UK gilts traded nearly flat Monday as investors remain sidelined in any major deal amid subdued trading session. Also, investors are now curiously eyeing the Bank of England’s monetary policy meeting scheduled to be held on Thursday.

The yield on the benchmark 10-year gilts, which moves inversely to its price, rose nearly 1 basis point to 1.48 percent, the super-long 30-year bond yields also slipped 1/2 basis point to 2.10 percent and the yield on short-term 2-year fell 1-1/2 basis points to 0.14 percent by 10:40 GMT.

President Trump certainly has the power to wreak trade havoc. A big blanket tariff would slice through supply chains, hurt American consumers and fly in the face of the global system of trade rules overseen by the World Trade Organisation (WTO).

A second risk is that the WTO architecture crumbles under the pressure of new cases. As long as Trump fights China on WTO rules, the world should avoid a trade war. Even if the WTO finds that American trade measures violate their rules, those rules set limits on the extent of retaliation allowed. Outside the WTO, all bets are off, The Economist reported.

Lastly, the BoE is scheduled to hold its first monetary policy of 2017 on February 2. We at FxWirePro, expect the central bank to remain on hold, following the robust economic growth and recovery in energy prices, which pushed inflation expectations.

Meanwhile, the FTSE 100 fell 0.86 percent to 7,122.75 by 10:30 GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at 28.96 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex