UK Gilt below the 100 day MA
The UK 30-year gilt fell to the lowest level since September 22, and in the process is breaking below its 100-day moving average at 4.713% (see blue line in the chart above).
The last time the price traded below its 100-day moving average was back on April 11. Staying below the level should lead to lower levels. The low from September 14 comes in at 4.567% and is the next downside target.
Below that, the rising 200-day moving average is at 4.400% (green line in the chart above). The last time the price traded below its 200-day Moving Average was back on January 3, 2022.
Last week the Bank of England Rates unchanged for the 2nd consecutive meeting.
- The Monetary Policy Committee voted 6-3 in favor of maintaining the main bank rate, with three members preferring a 25 basis point hike to 5.5%.
- Bank of England Governor Andrew Bailey emphasized the need to keep interest rates high to combat inflation and return it to the 2% target sustainably.
- Inflation in the UK has weakened to 6.7% but remains well above the central bank's target, while economic activity has softened, and the labor market has shown signs of loosening.
- Some analysts believe that the Bank of England may have reached the peak of its interest rate hiking cycle and could consider rate cuts in the future to stimulate economic growth.
- The UK's economic outlook is described as "on a knife edge," with challenges such as slow growth, elevated inflation, tight labor markets, and the need for consumer pay to catch up with inflation.