UK gilts nearly flat in quiet trading session; investors await Yellen’s speech

The UK gilts traded nearly flat Thursday, succumbing to thin trading activity during a relatively quiet session that witnessed data of little significance. The yield on the benchmark 10-year gilts hovered around 0.554 percent, the super-long 40-year bond yield remained steady at 1.115 percent and the yield on short-long 2-year bond climbed 1/2 basis point to 0.149 percent by 10:24 GMT.

Also, markets are likely to maintain recent range in the lead up to Fed Chair Yellen’s Jackson Hole speech on Friday.

In terms of recent economic data release, the United Kingdom mortgage approvals fell to 18-month low in July. However, business lending strengthened after a significant downturn for June and there has been a generally stronger trend over the first seven months of 2016.

British banks approved 37,662 new mortgages in July, the lowest seasonally-adjusted number since January 2015. Economists had predicted a fall to around 38,000, data released by the British Bankers’ Association showed Wednesday.

The BBA said gross mortgage borrowing rose 6 percent to GBP12.6 billion in July compared to the same month last year. Re-mortgaging was also 6 percent higher in July in contrast to 2015 and 21 percent up in the first seven months of this year.

Meanwhile, the FTSE 100 traded 0.28 percent lower at 6,816.46 by 10:24 GMT.