Slowing UK inflation has sparked increased expectations for interest rate cuts by the Bank of England, leading to a rally in UK government bonds and a decrease in their yields. This development has had a ripple effect across global markets, with lower yields on UK gilts reducing the relative attractiveness of the British pound and causing fluctuations in its exchange rate. Meanwhile, the anticipation of a potential interest rate hike by the Bank of Japan has strengthened the yen against the dollar, contributing to a decline in the Bloomberg Dollar Spot Index.
The easing of global bond yields, coupled with a weaker dollar, has supported gains in commodity prices, including oil. West Texas Intermediate (WTI) crude oil prices have advanced, reflecting broader investor optimism and increased risk appetite amidst these currency and bond yield movements. As of 05:51 on January 15, WTI crude is trading at $77.69 per barrel, up from its last close of $77.50.