UK gilts nearly flat after January construction PMI fails to cheer investors; BoE policy meeting in focus

The United Kingdom’s gilts remained nearly flat during Monday’s late afternoon session after the country’s construction PMI failed to cheer market investors ahead of the Bank of England’s (BoE) monetary policy meeting, scheduled to be held by end of this week, which shall provide further direction to the debt market.

The yield on the benchmark 10-year gilts, hovered around 1.247 percent, the super-long 30-year bond yields steadied at 1.751 percent and the yield on the short-term 2-year too remained flat at 0.769 percent by 11:15GMT.

The headline seasonally adjusted IHS Markit/CIPS UK Construction Total Activity Index dropped to 50.6 in January, from 52.8 in December. The index has posted above the 50.0 no-change mark in each month since the snow-related decline seen in March 2018, but the latest expansion was the weakest seen over this ten month period of growth.

Lastly, construction firms remain positive about the outlook for business activity in 2019. Around 41 percent of the survey panel anticipate a rise in output, while only 16 percent forecast a fall. However, the resulting index signalled a moderation in optimism since December.

Meanwhile, the FTSE 100 rose 0.24 percent to 7,039.09 by 11:20GMT, while at 11:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bearish at -118.75 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex