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UK gilts sag following solid rebound in equities

The UK gilts saw sharp selling Tuesday alongside a solid rebound in equities on Tuesday during a relatively quiet session. The yield on the benchmark 10-year gilts rose 2-1/2 basis points to 0.584 percent, the super-long 40-year bond yield jumped 1 basis point to 1.190 percent and the yield on short-long 2-year bond climbed 2 basis points to 0.145 percent by 10:20 GMT.

According to Bloomberg, the BOE is scheduled to buy another 1.17 billion pounds ($1.54 billion) of long-dated gilts Tuesday. Despite the shortfall two weeks ago, subsequent purchases of shorter-maturity bonds drew an abundance of offers, and its second reverse auction for long-dated debt beat its purchase target on August 16.

In the latest CBI trends survey the headline order book balance for August came in at -5, better than market expectations for -9, but lower than the -4 reading in July. Lastly, investors will remain keen to focus on the upcoming second quarter gross domestic product GDP figure.

Meanwhile, the FTSE 100 traded 0.52 percent higher at 6,863.90 by 10:20 GMT.

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