UK gilts dropped, pushing the yields higher as markets expect a sharper rise in the consumer price index due for release tomorrow. At the time of writing, the 10-yr yield was up almost 4 basis points (bps) at 1.404%. The short duration 2-yr yield was up more than 2 bps at 0.408%. The consumer price data is expected slightly higher from the previous month (seen at 0.3% m/m in March from 0.2% in Feb). The core is also seen improving to 1.3% y/y. However, Bank of England is still seen keeping the rates unchanged and maintain its “wait and watch” approach. For more information, read our latest forex news.