UK gilts gain ahead of 10-year auction amid muted trading session

The United Kingdom’s gilts gained during European trading hours Wednesday ahead of the country’s 10-year auction, scheduled to be held on July 23 by 09:45GMT.

The yield on the benchmark 10-year gilts, slipped 1-1/2 basis points to 0.719 percent, the 30-year yield rose slumped nearly 2-1/2 basis points to 1.339 percent and the yield on the short-term 2-year edged tad down to 0.500 percent by 10:15GMT.

Politics will dominate in the UK this week, with the announcement of the winner of the Conservative leadership election to be made tomorrow morning. Assuming that no major scandals come to light before then, the highly divisive Boris Johnson seems bound to be confirmed as Theresa May’s replacement as head of the ruling party, Daiwa Capital Markets reported.

The following day, Theresa May will take questions in the House of Commons for the last time, after which she will head to Buckingham palace to resign formally as Prime Minister. Johnson should be confirmed as Prime Minister shortly afterwards, allowing him to deliver a first speech from Downing Street later that day, and a first statement to the House of Commons the following day, the report added.

Meanwhile, the FTSE 100 remained tad 0.36 percent higher at 7,536.05 by 10:20GMT.