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UK Ten-year Gilt yield recovers after inflation data

FXStreet (Mumbai) - The benchmark bond yield in the UK recovered part of its losses after the official data revealed price pressures in the UK ticked up in October.

The Ten-year yield traded at 2.106% at the time of writing, after having recovered from the day’s low of 2.084%. As per the data from the Office for National Statistics, UK CPI increased 1.3% in October, up from September's 1.2% reading. Though the data was in-line with the market expectation, yields have ticked up since price pressures actually increased in October.

The uptick in inflation comes a week after the Bank of England (BOE) quarterly inflation report (QIR) expressed a threat if inflation falling below 1% in next six months. Meanwhile, the core figure, which strips out the most volatile prices, like food and tobacco, came-in slightly lower than market expectation at 1.5%.

The ten-year yields increased post the data as the bond markets erase part of the disinflation threat, that was priced-in post last week’s QIR report.

Ten-year yield Technical Levels

The yield has an immediate resistance at 2.125% and 2.143%. Meanwhile, support is located at 2.089% and 2.077%.

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