FxWirePro: Daily Commodity Tracker - 21st March, 2022 
The UK gilts slumped Wednesday after surging during the first half of the month and continued to hover around 1.05 percent to 1.15 percent range lately. While yields are likely to hold this range in short-term as the next move to be higher due both the U.S. spillover as well as the effect of the weakening pounds.
The yield on the benchmark 10-year gilts, which moves inversely to its price, rose 5 basis points to 1.138 percent (hits 4-months high), the super-long 40-year bond yield also jumped 5 basis points to 1.683 percent and the yield on short-term 2-year bond climbed 4 basis points to 0.291 percent by 09:50 GMT.
The Bank of England Governor Mark Carney said that pounds move has been substantive and there has been a fairly substantive move in the British exchange rate, which the MPC has to take into account in its policy deliberations. He said that the MPC however needs to consider how persistent the move in pounds is likely to be.
This gives us a pretty strong signal that the BoE MPC might after all choose to stand pat at the Nov meeting; the more so as Carney says that monetary policy has been overburdened. This suggests that he’d prefer fiscal policy to now take over the baton in pursuant of the authorities’ dash-for-growth objectives. This should calm pounds nerves somewhat for the time being, following the sharp Cable sell-off seen during the latter part of Tuesday’s session.
This week, investors will remain keen to focus on the third-quarter GDP readings due to be released on Thursday, October 27. We foresee that the Q3 GDP to increase 0.3 percent q/q, from previous 0.7 percent. On an annual basis, it is likely to remain unchanged at 2.1 percent y/y.
Last week, the acceleration of UK CPI inflation to 1.0 percent y/y from 0.6 percent in August occurs on the back of a 0.2 percent m/m increase and stands at its highest reading since November 2014. The m/m increase, driven higher by road fuel costs, clothing & footwear costs, hotel accommodation costs and gas prices, is actually consistent with the average m/m rise for a September month over the past 10 years.
Meanwhile, the FTSE 100 traded 0.95 percent lower at 6,950.70 by 10:00 GMT.
