UK gilts disappoint ahead of manufacturing production, BoE Governor Carney’s speech

The UK gilts disappointed Thursday as investors wait to watch the country’s manufacturing production for the May, scheduled to be released on July 7. Also, the Bank of England Governor Mark Carney’s speech, due on the same day will provide further direction to the debt market.

The yield on the benchmark 10-year gilts, jumped nearly 4-1/2 basis points to 1.30 percent, the super-long 30-year bond yields climbed 4 basis points to 1.92 percent and the yield on the short-term 2-year traded 3 basis points higher at 0.34 percent by 10:10 GMT.

The FOMC minutes from the June 14 monetary policy meeting released yesterday did not trigger much of a market reaction as they revealed the lack of consensus among policymakers on the timing of the next rate hike and the commencement of balance sheet normalisation.

However, with the FOMC minutes out of the way, focus now shifts to Friday’s US non-farm payrolls data for the month of June with today’s ADP employment report likely to set the tone.

Meanwhile, the FTSE 100 traded 0.70 percent lower at 7,316.50 by 10:10 GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bullish at 139.04 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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