UK gilts slump ahead of BoE monetary policy decision

The UK gilts slumped Tuesday ahead of the Bank of England’s (BoE) monetary policy decision, scheduled to be held on February 2. Markets will the, focus on the comments delivered by BoE Governor Mark Carney post the meeting minutes.

The yield on the benchmark 10-year gilts, which moves inversely to its price, jumped nearly 2 basis points to 1.46 percent, the super-long 30-year bond yields also rose 1-1/2 basis points to 2.09 percent and the yield on short-term 2-year moved 1 basis point higher to 0.15 percent by 10:20 GMT.

The BoE is widely expected to maintain its interest rate at a historic low of 0.25 percent amid stronger than expected lift in inflation was more broad-based than widely anticipated and recovery in economic growth.

All but one of the 67 economists polled by Reuters expected that the central bank would keep its policy unchanged when it announces the outcome of the latest meeting of its rate-setters on next Thursday.

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.

Meanwhile, the FTSE 100 rose 0.56 percent to 7,157.25 by 10:30 GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bearish at -184.22 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex