UK gilts continue to slump on looming uncertainties over upcoming snap election

The UK gilts slumped Tuesday as the upcoming snap election in the country, scheduled for June 8 as was declared by Prime Minister Theresa May has added uncertainties and clouded the outlook for the money market.

The yield on the benchmark 10-year gilts, slumped 3 basis points to 1.02 percent, the super-long 30-year bond yields slipped 1 basis point to 1.68 percent and the yield on the short-term 2-year traded 1-1/2 basis points lower at 0.08 percent by 10:00 GMT.

Indeed, several polls suggest that May’s lead had narrowed considerably from when she first called the election, with the latest YouGov poll giving the Tories only a single-digit percentage lead, down from around 20 percentage points in mid-April.

Following the weekend’s tragic attacks in London, official election campaigning has now resumed ahead of the vote on Thursday. While Prime Minister Theresa May’s Conservative Party is still widely expected to take the largest share of the vote, recent polls have flagged significant uncertainty about the precise outcome, suggesting that it might be a tighter run race than initially thought.

Meanwhile, the FTSE 100 traded nearly flat at 7,523.75 by 10:10 GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained slightly bearish at -87.54 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex