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2 Jan 2015
UK 10-yr Gilt yield rises despite weak PMI data
FXStreet (Mumbai) - The UK 10-yr Gilt yield advanced today, despite the UK manufacturing PMI in December printing at a three-month low of 52.5.
The yield rose 2.4 basis points to 1.78%, compared to the previous session’ close of 1.756%. The fall in the UK manufacturing activity led to a sharp fall in the GBP/USD pair as markets questioned the necessity to raise the interest rates in the UK. The Bank of England has already revised its economic forecast lower in Nover citing “subdued external demand”. The rationale is proven right as the PMI declined mainly due to sluggish external demand.
Moreover, the Gilt yields gained in line with its US counterparts – 10-yr Treasury yields – which are up 3 basis points to 2.204%.
UK 10-yr yield Technical Levels
The immediate support is seen at 1.765% and 1.747% respectively. On the flip side, a breach of immediate resistance at 1.797%, shall open doors for a re-test of 1.862%.
The yield rose 2.4 basis points to 1.78%, compared to the previous session’ close of 1.756%. The fall in the UK manufacturing activity led to a sharp fall in the GBP/USD pair as markets questioned the necessity to raise the interest rates in the UK. The Bank of England has already revised its economic forecast lower in Nover citing “subdued external demand”. The rationale is proven right as the PMI declined mainly due to sluggish external demand.
Moreover, the Gilt yields gained in line with its US counterparts – 10-yr Treasury yields – which are up 3 basis points to 2.204%.
UK 10-yr yield Technical Levels
The immediate support is seen at 1.765% and 1.747% respectively. On the flip side, a breach of immediate resistance at 1.797%, shall open doors for a re-test of 1.862%.