UK 10-year gilt yields hit highest since May as Yellen strengthen case for December rate hike hopes

The UK 10-year gilt yields hit highest since May as investors moved away from the safe-haven buying amid following weakness in the U.S. Treasuries after Federal Reserve Chair Janet Yellen in her testimony to the Joint Economic Committee (JEC) of Congress strengthened the case for December interest rate hike.

The yield on the benchmark 10-year gilts, which moves inversely to its price, rose 7 basis points to 1.48 percent, the super-long 40-year bond yield jumped more than 6 basis points to 1.894 percent and the yield on short-term 3-year climbed 1 basis point to 0.323 percent by 10:20 GMT.

The British bonds have been closely following developments in the U.S. debt market. The United States benchmark 10-year Treasury yield jumped 5-1/2 basis points to 2.32 percent. The probability of a December rate hike by the Federal Reserve going from as low as 30 percent to as high as 96 percent after the U.S. presidential election.

Federal Reserve Chair Janet Yellen, in her congressional testimony, strengthened bets that the central bank was on the right path to hike interest rates in December. This was the first direct signal from the Fed after December last year.

Moreover, retail sales in the United Kingdom grew at the highest pace in 14 years, following the surge in shopping spree by Britons on the eve of Halloween. Also, a colder weather lifted sales of winter clothes and supermarket necessities.

Retail sales volumes jumped by 1.9 percent on the month in October after edging up 0.1 percent in September, data released by the Office for National Statistics showed Thursday, almost double the highest forecast in a Reuters poll of economists.

Meanwhile, the FTSE 100 traded 0.66 percent lower at 6,751.50 by 10:20 GMT. While at 10:00 GMT, the FxWirePro's Hourly GBP Strength Index stood neutral at +33.72 (higher than +75 represents purely bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex