UK gilts maintain upside ahead of today’s Parliament Indicative votes on Brexit; Q4 GDP eyed too

The United Kingdom’s gilts gained during Wednesday’s afternoon session, as investors will remain focussed today on the House of Commons ahead of the MPs’ first round of indicative votes on various Brexit scenarios. These votes will simply select the most popular options that will be debated and voted on individually next Monday.

The yield on the benchmark 10-year gilts, suffered 2 basis points to 0.989 percent, the super-long 30-year bond yields slumped nearly 2-1/2 basis points to 1.507 percent and the yield on the short-term 2-year slipped nearly 1 basis point to 0.656 percent by 11:15GMT.

Sixteen motions have been submitted, from no deal to a second referendum via a spectrum of deals including or excluding a permanent customs union and/or single market participation, with the House of Commons set to debate them from 14.00GMT, the ballot paper to be printed at 16.00GMT, voting to commence at 19.00GMT and results likely around 20.30GMT, Daiwa Capital Markets reported.

Of course, Prime Minister Theresa May hopes that an indication of possible majorities in favour of a soft Brexit or second referendum will scare the DUP and hardcore Brexiters to finally give their backing to her deal. Certainly, the reported suggestion by attorney general Geoffrey Cox yesterday that the Government would be in breach of the ministerial code (and law) if it fails to follow MPs instructions, should they pass a motion to engage in an alternative Brexit arrangement, might well be enough to twist their arms, the report added.

Meanwhile, the FTSE 100 remained 0.35 percent down at 7,170.75 by 11:20GMT, while at 11:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bullish at 124.74 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex