UK gilts gain on safe-haven demand after PM May warns of 'critical' threat

The UK gilts gained Wednesday as investors poured into safe-haven instruments after Prime Minister Theresa May, commented, post the terrorist attack in Manchester, that the level of threat has become 'critical'. Also, investors are looking forward to the country’s first-quarter gross domestic product (GDP), scheduled to be released on May 25 for further direction in the debt market.

The yield on the benchmark 10-year gilts, slumped 1-1/2 basis points to 1.06 percent, the super-long 30-year bond yields plunged nearly 2 basis points to 1.68 percent and the yield on the short-term 2-year traded 2 basis points lower at 0.09 percent by 10:00 GMT.

The UK is on a critical terror alert with military troops set to bolster police forces after the Prime Minster raised the threat level to its highest possible rating. PM May made the sombre announcement in a live television statement from Downing Street on Tuesday evening.

Monday night's attack at a concert by US pop star Ariana Grande left 22 people dead, including an eight-year-old girl, and dozens injured. Raising the level to critical means that military personnel could be deployed to support armed police officers - part of a plan known as Operation Temperer.

"It is a possibility that we cannot ignore that there is a wider group of individuals linked to this attack," PM May said.

Meanwhile, the FTSE 100 rose 0.25 percent or 17.96 points to 7,503.25 by 10:10 GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at -38.39 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex