UK gilts suffer after February GDP, manufacturing production cheers market investors

The United Kingdom’s gilts suffered after the country’s gross domestic product (GDP) for the month of February and manufacturing production for the similar period, cheered market participants, albeit slowing from the previous reading in January.

The yield on the benchmark 10-year gilts, hovered around 1.115 percent, the super-long 30-year bond yields remained flat at 1.656 percent and the yield on the short-term 2-year traded tad lower at 0.715 percent by 10:30GMT.

Gross domestic product grew 0.2 percent m/m in February, the Office for National Statistics reported on Wednesday, slowing from the 0.5 percent m/m expansion seen in January but in line with consensus, while on a y/y basis, the economy expanded by 2 percent, higher than estimates of 1.7 percent, compared to prior 1.5 percent.

In a separate report, manufacturing production grew 0.9 percent m/m in February, while industrial production increased 0.6 percent m/m.

Lastly, all eyes will be on Brussels tonight as EU leaders meet to discuss how to respond to PM Theresa May’s request for an extension of the Article 50 deadline beyond Friday’s cliff-edge. Not least out of solidarity for Ireland and to avoid a significant negative economic shock, the EU leaders seem bound to offer May a delay to Brexit. But the length of duration and the conditions to be attached are unclear, Daiwa Capital Markets reported.

Meanwhile, the FTSE 100 remained nearly flat at 7,429.75 by 10:40GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at -7.86 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex