UK gilts modestly lower in quiet trade on last working day of the year

The UK gilts traded modestly lower on Friday, the last working day of the year as investors remain sidelined in any big deal ahead of long New Year holidays. Also, we foresee that the gilt prices will keep drifting between small gains and losses in quiet trading due to a long global Christmas and New Year holidays.

The yield on the benchmark 10-year gilts, which moves inversely to its price, rose 1 basis point to 1.24 percent, the super-long 40-year bond yield also climbed 1 basis point to 1.69 percent and the yield on short-term 2-year bounced 1 basis point to 0.07 percent by 08:40 GMT.

Also, trading activity to resume after New Year celebrations, probably from the second week of January, 2017 as global market receives no more important data till then. The market will now directly open on Tuesday, January 3.

On Wednesday, the British Bankers Association reports mentioned that the UK’s new mortgage loans for November slipped to 40.7k from previous up 40.8k, undershooting expectations for a rise.

According to the latest Citi/YouGov survey, UK’s inflation expectations for the short term are broadly steady at 2.4 percent whilst expectations for the longer term have risen to 3.0 percent up from 2.8 percent in November.

Meanwhile, the FTSE 100 traded flat at 7,117 by 08:40 GMT. While at 08:00 GMT, the FxWirePro's Hourly GBP Strength Index stood neutral at +9.42 (higher than +75 represents purely a bullish trend).