UK gilts climb ahead of August manufacturing production, trade balance data

The United Kingdom’s gilts climbed during Monday’s afternoon session ahead of the country’s manufacturing production for the month of August and trade balance data, scheduled to be released on October 10 by 08:30GMT respectively.

The yield on the benchmark 10-year gilts, slumped 3 basis points to 1.694 percent, the super-long 30-year bond yields rose 1 basis point to 2.020 percent and the yield on the short-term 2-year traded nearly 3 basis points lower at 0.894 percent by 10:00GMT.

In terms of UK economic news, bar any breakthroughs in the Brexit negotiations, Wednesday will be the day to watch in the coming week with the usual monthly output and trade data, as well as the corresponding GDP estimate, due for release. Expectations are for a very modest increase in output from the services and industrial sectors in August, and a slight drop in construction.

So, despite an anticipated deterioration in the trade deficit that month from a five-month low, the monthly estimate of GDP is forecast to have risen just 0.1 percent m/m. However, coming on the back of a 0.3 percent m/m increase in July, this would leave GDP on a 3m/3m basis unchanged at a seemingly healthy 0.6 percent, matching the firmest pace in a year.

Meanwhile, the FTSE 100 slipped 0.35 percent to 7,292.36 by 10:05GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bullish at 115.765 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex