The UK gilts plunged Wednesday as investors remained cautious ahead of the country’s 10-year auction, scheduled to be held on July 6 will add more clarity to the debt market. However, market participants have largely shrugged-off the lower-than-expected services PMI for the month of June.
The yield on the benchmark 10-year gilts, jumped 3 basis points to 1.28 percent, the super-long 30-year bond yields climbed nearly 4-1/2 basis points to 1.90 percent and the yield on the short-term 3-year traded 1 basis point higher at 0.42 percent by 11:10 GMT.
At 53.4, the headline seasonally adjusted IHS Markit/CIPS Services PMI Business Activity Index posted above the 50.0 no-change mark for the eleventh successive month in June. However, the index was down from 53.8 in May and signalled the slowest expansion of service sector output since February. The average reading in the second quarter as a whole (54.3) was in line with that recorded during the first three months of 2017.
Meanwhile, the FTSE 100 traded 0.20 percent lower at 7,361.75 by 11:10 GMT, while at 11:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at 24.10 (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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