UK 10-year gilt yields at 1-month low despite better-than-expected manufacturing PMI; BoE Gov Carney, PM May’s speech in focus

The UK 10-year gilt yields slipped to a one-month low during the mid-European session Thursday despite the rise in the country’s manufacturing PMI for the month of February. Also, market participants are awaiting the Bank of England Governor Mark Carney and Prime Minister Theresa May’s speech, scheduled for March 2 for further direction in the debt market.

The yield on the benchmark 10-year gilts, slumped nearly 4 basis points to 1.46 percent, the super-long 30-year bond yields plunged 3 basis points to 1.86 percent and the yield on the short-term 2-year traded 2 basis points lower at 0.75 percent by 10:10GMT.

The upturn in the UK manufacturing sector slowed further during February. At 55.2, the seasonally adjusted IHS Markit/CIPS Purchasing Managers’ Index® (PMI® ) fell to an eight-month low and lost further ground after hitting a 51-month high last November.

UK manufacturers’ outlook also remained positive in February. Almost 56 percent of companies forecast that output would be higher in one year’s time, compared to only 6 percent expecting a decline. Business confidence was linked to planned expansions, rising new order inflows, new product launches, investment activity and marketing efforts. Moreover, the degree of positive sentiment remained close to January’s 28-month high.

Meanwhile, the FTSE 100 traded 0.55 percent lower at 7,192.00 by 10:10 GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bearish at -116.11 (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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