UK gilts decline after reading higher-than-expected April CPI; investors await April retail sales

The UK gilts declined Tuesday after reading the country’s higher-than-expected consumer price inflation (CPI), for the month of April. Further, the release of retail sales, due on May 18, will provide further direction to the debt market.

The yield on the benchmark 10-year gilts,  jumped 1-1/2 basis points to 1.15 percent, the super-long 30-year bond yields rose 1/2 basis point to 1.80 percent while the yield on the short-term 2-year traded 1-1/2 basis points higher at 0.14 percent by 09:50 GMT.

UK inflation moved further above the Bank of England’s 2.0 percent target in April, highlighting the growing squeeze on household budgets.

Data from the Office for National Statistics showed consumer prices rising 2.7 percent higher than a year ago in April compared with 2.3 percent in March. This is the highest rate of inflation since September 2013 and looks almost certain to lead to an intensifying fall in real wages. Regular wage growth has slowed to just 2.2 percent 

Meanwhile, the FTSE 100 rose 0.58 percent or 43.38 points to 7,497.25 by 09:50 GMT, while at 09:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bearish at -136.99 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex