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18 Mar 2015
UK Gilt yields dropped sharply after BOE minutes
FXStreet (Mumbai) - The yields on the short duration and the long duration Gilts in the UK fell after the Bank of England (BOE) minutes and a disappointing wage growth data further bolstered speculation of a delay in the interest rate hike.
The 10-year yield in the UK fell 6.5 basis points (bps) to 1.62%, while the 30-year yield declined 4.2 bps to 2.418%. Meanwhile, the 2-year yield, which mimics short-term interest rate expectations, fell 4.9bps to 0.438%. The 1-year yield also fell 3.1bps to 0.366%.
The yields have been falling since the BOE governor Carney voiced concerns regarding the disinflationary impact of the strong Pound in the last week. Markets read his comments as a hint of a possible delay in the interest rate hike. The BOE minutes voicing similar concerns today further supported the possibility of a delay in the rate hike, thereby causing a sharp fall in the Gilt yields.
The 10-year yield in the UK fell 6.5 basis points (bps) to 1.62%, while the 30-year yield declined 4.2 bps to 2.418%. Meanwhile, the 2-year yield, which mimics short-term interest rate expectations, fell 4.9bps to 0.438%. The 1-year yield also fell 3.1bps to 0.366%.
The yields have been falling since the BOE governor Carney voiced concerns regarding the disinflationary impact of the strong Pound in the last week. Markets read his comments as a hint of a possible delay in the interest rate hike. The BOE minutes voicing similar concerns today further supported the possibility of a delay in the rate hike, thereby causing a sharp fall in the Gilt yields.