UK gilts fall after July retail sales rebound above market expectations

The United Kingdom’s gilts fell during European session Thursday after the country’s retail sales for the month of July rebounded above market expectations amid persistent geopolitical disturbances.

The yield on the benchmark 10-year gilts, rose 1 basis point to 1.23 percent, the super-long 30-year bond yields hovered around 1.70 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points higher at 0.70 percent by 10:10GMT.

According to data released by the Office for National Statistics (ONS), retail sales volumes rose by 0.7 percent, and were 3.5 percent higher than a year earlier, above economists’ average forecasts in a Reuters poll for a 0.2 percent monthly rise and a 3.0 percent annual gain. This compares with sales growth a year earlier of just 1.1 percent though is below rates seen in 2015 and 2016, Reuters reported.

Of course, Turkey continues to preoccupy minds of many investors, and the lira is again a little firmer this morning, currently trading through 5.80/$ for the first time since Friday. That partly reflects the impact of yesterday’s regulatory action to limit scope for shorting the currency, and perhaps also Qatar’s reported pledge of $15 billion of FDI for Turkey, Daiwa Capital Markets reported.

Meanwhile, the FTSE 100 fell 0.61 percent to 7,545.22 by 10:15GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bearish at -124.72 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex