UK gilts slump after reading higher-than-expected April manufacturing PMI

The UK gilts slumped Friday after witnessing a higher-than-expected manufacturing PMI for the month of April. Also, the country’s construction PMI and services PMI, due to be released on May 3 and 4 respectively are also closely awaited by the investors.

The yield on the benchmark 10-year gilts, jumped 2-1/2 basis points to 1.11 percent, the super-long 30-year bond yields also climbed nearly 3-1/2 basis points to 1.74 percent while the yield on the short-term 2-year traded nearly 1-1/2 basis points higher at 0.08 percent by 10:20 GMT.

April’s manufacturing PMI rose sharply to 57.3 from 54.2 in March, beating both consensus expectations of a decline to 54.0 and forecast of a more measured rise to 54.4. The outturn goes some way to narrowing the divergence that had opened up between the manufacturing PMI and firmer readings from other business surveys including that of the CBI Industrial Trends survey in recent months. The rise pushed the headline index to its highest level since April 2014 and well above its long-term average of 51.6.

Lastly, the majority of global equity markets were firmer in early trade on Tuesday, with investors focusing on stronger than expected US tech industry earnings and easing worries over North Korean after U.S. President Donald Trump left the door open for a meeting with North Korea's supreme leader Kim Jong Un.

Meanwhile, the FTSE 100 rose 0.42 percent or 30.36 points to 7,235.05 by 10:20 GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at 42.55 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex