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Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
The UK gilts witnessed a heavy sell-off on Monday, following a landmark deal by non-OPEC producers to lower production for the first time in 15 years.
The yield on the benchmark 10-year gilts, which moves inversely to its price, rose 3 basis points to 1.50 percent (highest since May this year), the super-long 40-year bond yield also climbed 2-1/2 basis points to 2.13 percent and the yield on short-term 2-year bounced 4 basis points to 0.20 percent by 09:30 GMT.
The British bonds have been closely following developments in oil markets because of their impact on inflation expectations, which is well below the Bank of England's target range. Crude oil prices jumped more than 4 percent after OPEC and non-OPEC countries agreed to cut production for the first time since 2001. The International benchmark Brent futures rose 5.14 percent to $57.12 and West Texas Intermediate (WTI) climbed 5.22 percent to $54.18 by 08:50 GMT.
Markets will remain focused on the Federal Reserve last monetary policy decision for 2016, which is scheduled to be released on December 14. The Federal Reserve is expected to increase the target range of the key interest rate by 25 basis points to 0.50 percent to 0.75 percent on December 14, with a unanimous decision. Little change to the statement, though the Committee is likely to acknowledge that market-based measures of inflation compensation have risen further.
The Bank of England (BoE) in its latest inflation survey raised 1-year inflation expectations to 2.8 percent, from estimate of 2.2 percent in August, 2-year forecast to 2.5 percent, from an earlier forecast of 2.2 percent, 5-year forecast to 3.1 percent vs prior 3.0 percent. Additionally, the central bank increased 12-months rate rise expectations to 41 percent, from previous expectations of 21 percent.
Moreover, the European Central Bank in its last week’s final monetary policy decision of 2016 reduced the pace of its monthly bond-buying to 60 billion Euros from 80 billion, but extended the programme by nine months (April-October). The central bank reiterated that quantitative easing (QE) will run until inflation's path is in line with its goal. Also, noted that it may increase the size or duration if needed.
We would describe this tapering decision as more hawkish than the expected extension of the current pace of quantitative easing by 6 months.
Meanwhile, the FTSE 100 traded 0.17 percent lower to 6,941 by 09:30 GMT. While at 09:00 GMT, the FxWirePro's Hourly GBP Strength Index stood neutral at -44.72 (lower than -75 represents purely bearish trend).
