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The United Kingdom’s gilts suffered during European session Monday despite investors facing a disappointment in the country’s monthly gross domestic product (GDP) and manufacturing production for the month of April, released early today.
The yield on the benchmark 10-year gilts, jumped nearly 2-1/2 basis points to 0.837 percent, the super-long 30-year bond yields rose nearly 2 basis points to 1.417 percent and the yield on the short-term 2-year also traded 2 basis points higher at 0.553 percent by 09:25GMT.
According to data released by the UK’s Office for National Statistics, the country’s manufacturing output plunged 3.9 percent, the most in almost 17 years in April as the boost from Brexit stockpiling evaporated and car producers went ahead with planned shutdowns, which forced the economy into shrinkage for a second straight month, Bloomberg reported.
The economic growth of the country fell into short hands, contracting by -0.4 percent, reporting the biggest monthly drop since March 2016. Further, growth in the latest three months was a weaker-than-forecast 0.3 percent, down from 0.5 percent in the first quarter.
Lastly, attention in Britain this week will no doubt be on politics, as the nomination process for the Conservative party leadership closes today. As things currently stand there are eleven candidates, although we are likely to see this number reduce if potential contenders fail to garner the required eight endorsements to progress, Daiwa Capital Markets reported.
The first ballot among MPs to officially eliminate one candidate will be held on Thursday, with subsequent rounds to be conducted over the following week. When the number of contenders has been whittled down to two, party members will be allowed to vote, with the winner likely to be confirmed in the week commencing July 22, the report added.
Meanwhile, the FTSE 100 remained tad 0.51 percent higher at 7,368.75 by 09:30GMT, while at 09:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at 35.63 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex
