UK gilts surge despite better-than-expected February CPI; PM May to request extension of Article 50 deadline

The United Kingdom’s gilts surged during Wednesday’s afternoon session, after investors have largely shrugged-off the better-than-expected consumer price inflation for the month of February.

Also, British Prime Minister Theresa May is expected to write to the European Union to request an extension to the Article 50 deadline.

The yield on the benchmark 10-year gilts, slipped 1-1/2 basis points to 1.174 percent, the super-long 30-year bond yields suffered 2 basis points to 1.655 percent and the yield on the short-term 2-year traded tad lower at 0.750 percent by 10:50GMT.

After an acrimonious special Cabinet meeting yesterday, reports this morning suggest that she will only seek a short delay – to June – to avoid mutiny from her Brexiter Minister colleagues. That would then allow her to try one last time to get her deal passed in Parliament next week – with some reports suggesting March 28 as the key date for a new meaningful vote. But, of course, success in such an MV3 might at this stage still seem unlikely, Daiwa Capital Markets reported.

Britain’s February CPI increased 1.9 percent from the year before, surprising economists who had forecast it to hold steady at January’s reading of 1.8 percent, which had been its lowest since December 2016.

Meanwhile, the FTSE 100 remained tad 0.15 percent down at 7,312.00 by 10:55GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bearish at -105.96 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex