UK gilts nearly flat in muted trading; investors eye June manufacturing production

The UK gilts traded nearly flat Monday as investors remained side-lined in any major trading activity amid a lack of economically significant data. Also, investors are closely eyeing the country’s manufacturing production for the month of June for further direction in the debt market.

The yield on the benchmark 10-year gilts, slid 1/2 basis point to 1.17 percent, the super-long 30-year bond yields fell nearly 1 basis point to 1.81 percent and the yield on the short-term 2-year hovered around 0.25 percent by 10:40 GMT.

The most notable day in the UK’s data calendar, meanwhile, will be Thursday, when the ONS will publish its latest short-term output indicators for June, including industrial production, construction output and trade figures. The preliminary Q2 GDP release pencilled in a rise of just 0.1 percent m/m in industrial output that month, while construction output was estimated to have surged by 1.8 percent m/m, which would partly reverse decreases of more than 1.0 percent m/m in the previous two months.

Among other notable data, the BRC will release its retail sector survey tomorrow, which is likely to echo results of a similar survey recently released by the CBI suggesting that the High Street activity rose in July. In the markets, the DMO will sell index-linked bonds tomorrow.

Meanwhile, the FTSE 100 traded 0.05 percent higher at 7,158.25 by 13:20 GMT, while at 11:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bearish at -120.81 (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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