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UK 10-year Bond yield declines after BOE inflation report

FXStreet (Mumbai) - The bond yields at the short-end and the long-end of the bond market curve in the UK declined after the Bank of England (BOE), in its quarterly inflation report, said that it would not confirm a time for the first interest rate hike.

The Ten-year yield declined to 2.191%, from the day’s high of 2.241% after the BOE inflation report titled heavily to the dovish side, squashing any hopes of a first interest rate hike in the next six months. Governor Carney stated that the bank sees the inflation target of 2% being achieved in 3 years, but not within 18-20 months. The central bank also revised the modal GDP forecast for 2015 to 2.9% from the previous forecast of 3.1%.

Meanwhile, the two-year yield, a barometer of short-term interest rate expectations, declined to 0.635% from the day's high of 0.701%.

Ten-year yield Technical levels

The yield has an immediate support located at 2.157%, under which it can fall to 2.118%. Meanwhile, resisatnce is seen at 2.241% and 2.291%.

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