UK gilts trend higher ahead of 10-year auction, FOMC members’ speech in focus

The UK gilts trended higher Thursday ahead of the 10-year auction scheduled later in the day. Also, investors are now looking forward to a host of speeches from the Federal Open Market Committee (FOMC) members post market hours.

The yield on the benchmark 10-year gilts, which moves inversely to its price, fell 4-1/2 basis points to 1.30 percent, the super-long 30-year bond yield also plunged 3-1/2 basis points to 1.96 percent and the yield on short-term 2-year slid 1/2 basis point to 0.17 percent by 9:50 GMT.

The UK gilts have been closely following movements in the U.S. debt market. The U.S. benchmark 10-year bond yields fell 6 basis points to 2.33 percent, from yesterday’s high of 2.39 percent.

Moreover, Donald Trump in his public appearance said that he is handling over his personal businesses to his son to avoid future discrepancies. Regarding a relationship with Russia, he claimed that association with Vladimir Putin is an asset, rather than a liability.

Further, according to the latest Citi/YouGov survey, UK’s inflation expectations for the short term are broadly steady at 2.4 percent whilst expectations for the longer term have risen to 3.0 percent up from 2.8 percent in November.

Meanwhile, the FTSE 100 snapped its long winning streak, falling 0.28 percent to 7,269.25 by 10:00 GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bearish at -128.13 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex