UK gilts climb after Q2 GDP fails to bolster markets

The UK gilts climbed Wednesday after investors moved into safe-haven assets, following the release of the country’s gross domestic product (GDP) for the second quarter of this year, which failed to push markets higher.

The yield on the benchmark 10-year gilts, slumped 2-1/2 basis points to 1.23 percent, the super-long 30-year bond yields plunged a little over 2 basis points to 1.86 percent and the yield on the short-term 2-year also traded 2 basis points lower at 0.29 percent by 10:00 GMT.

UK gross domestic product rose 0.3 percent in the three months to June, according to the Office for National Statistics, up slightly from the 0.2 percent rise seen in the opening quarter of the year. These meagre growth rates indicate that the economy has lost momentum in 2017, and will consequently fail to achieve the 1.8 percent expansion seen in 2016.

Further, business optimism slumped to the lowest since 2011 at the end of the second quarter, linked to deepening concerns about the path to Brexit, a renewed wave of domestic political uncertainty and evidence of more subdued consumer spending.

Meanwhile, the FTSE 100 jumped 0.66 percent to 7,484.50 by 10:10 GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained slightly bullish at 77.49 (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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