UK gilts plunge ahead of BoE Governor Carney’s speech, Q4 GDP

The UK gilts plunged Monday ahead of the Bank of England (BoE) Governor Mark Carney’s speech, scheduled to be held on Tuesday. Also, investors are waiting to watch the fourth-quarter gross domestic product (GDP), due for release on February 22.

The yield on the benchmark 10-year gilts, which moves inversely to its price, rose nearly 1-1/2 basis points to 1.22 percent, the super-long 30-year bond yields also jumped 1-1/2 basis points to 1.94 percent and the yield on the short-term 2-year traded higher by 1 basis point at 0.09 percent by 09:20 GMT.

Data from the Office for National Statistics (ONS) published on Wednesday showed that employment in the U.K. hit a record high of 74.6 pct in Q4 2016. The number of people in full-time employment rose by 45,000 in the three months to December.

The number of jobless fell 7,000 in the fourth quarter to 1.6 million people, leaving the unemployment rate at 4.8 per cent, the lowest in more than a decade. Data published on Wednesday also showed that average earnings were 2.6 percent higher over the fourth quarter compared with the same period a year earlier.

Lastly, markets will also focus on the 10-year auction, due to be held on February 23 for further direction in the debt market.

Meanwhile, the FTSE 100 fell 0.08 percent to 7,294.75 by 09:30 GMT, while at 09:00GMT, the FxWirePro's Hourly Pound Strength Index remained slightly bullish at 86.63 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex