UK gilts rise after March construction PMI misses market expectations; services PMI in focus

The UK gilts rose during European session Wednesday after the country’s construction PMI for the month of March missed market expectations, thus attracting investors into safe-haven instruments. Market participants will now be eyeing the services PMI, due to be released on April 5 by 08:30GMT for added direction in the debt market.

The yield on the benchmark 10-year gilts, fell 1 basis point to 1.34 percent, the super-long 30-year bond yields remained tad lower at 1.73 percent and the yield on the short-term 2-year traded 1 basis point lower at 0.82 percent by 09:10GMT.

The seasonally adjusted IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) fell sharply from 51.4 in February to 47.0 in March, to register below the 50.0 no-change threshold for the first time in six months.

Moreover, the latest reading signaled the fastest overall decline in construction output since July 2016. Where a drop in work was reported, survey respondents noted that unusually bad weather had disrupted staff availability and activity on site.

Meanwhile, the FTSE 100 slid 0.46 percent to trade at 7,000.69 by 09:10 GMT, while at 09:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at 29.98 (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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