LONDON: Gilts inched down early on Tuesday, as renewed optimism on company earnings dampened appetite for safe-haven assets, while investors also made room for a sale of 2015 gilts via mini-tender this session.
European stocks climbed after Swiss bank UBS confirmed cost-cutting plans and British energy firm BP raised its dividend.
The UK Debt Management Office will sell up to 1.5 billion pounds of the 4.75 percent 2015 gilt, with bidding due to close at 1030 GMT.
"We expect the supply to proceed smoothly given its relatively small size, while the Bank of England and DMO hold just over 60 percent of the combined amount of the issue outstanding," Barclays strategist Giuseppe Maraffino said.
At 0904 GMT, the December gilt future was 15 ticks lower at 119.50, while its German equivalent was 8 ticks lower.
"The market focus will remain on the euro area and - at first instance - the data releases," Lloyds strategists wrote.
"The numerous euro area confidence indicators are unlikely to alter the expectations for a 'difficult' Q4 for euro area countries in terms of growth," they added.
Investors will also keep an eye on a CBI survey of British retail sales, due at 1100 GMT, for further signs that the economic outlook is improving, which would lessen the chances of another round of quantitative easing from the central bank.
Several economists have changed their forecast for the BoE's November meeting, seeing further purchases of government bonds as less likely once the current 50 billion pound round is completed.
Ten-year gilt yields rose 1 basis points to 1.812 percent, with their spread over Bunds steady at 34 basis points.
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