Intraday Market Thoughts

10 Year Gilt Yield At Record Lows Below 2%

by Patrik Urban
Dec 23, 2011 13:26

UK net mortgage lending at record low, new mortgage approvals decline. Index of services fell, 10 year Gilt yield at lows. SNB reassures 1.20 floor for EURCHF. Durable goods, personal income and spending and Canadian GDP are next.

Currencies are trading in narrow ranges ahead of Christmas break. European equities rose by about 0.6% to 1%. Many European exchanges close early today, bonds and gold trading will end one hour earlier than usual so liquidity is likely to be thin.

UK net mortgage lending reached a record low in November at GBP 0.32 bln from October's GBP 0.825 bln. New mortgage approvals declined slightly to 34.78K from previous 35.2K. The index of services declined to -0.7% in October from a previous unchanged print which pushed the 10 year Gilt yield to record low below 2%.GBPUSD has been stuck within 1.5650 1.5720 range for a few days and it currently trades around 1.5670.

Quarterly SNB bulleting reiterated that the SNB will enforce EURCHF floor at 1.20 and is ready to take further measures if needed. EURCHF is slightly higher trading around 1.2235 after it found support at 1.22.

The NY session will kick off at 8:30 am ET with durable goods orders that are seen higher in November at 2% from previous -0.5%. Personal income is expected steady at 0.4% and personal spending should rise to 0.3% from 0.1%.

Canadian GDP which is due at the same time should rise in November 0.1% from 0.2% m/m and 2.7% from previous 3% y/y. USDCAD has been steadily falling since 12/19 and trades below 1.02.

November new home sales due at 10:00 am is anticipated higher at 315K from previous 307K.


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