UK gilts flat in subdued trade, 10-Year gilt auction in focus

The UK gilts traded nearly flat Monday as markets receive no more important data of great significance today.

The yield on the benchmark 10-year gilts, which moves inversely to its price, hovered around 1.45 percent mark, the super-long 40-year bond yield remained steady at 1.86 percent and the yield on short-term 3-year stood flat 0.20 percent by 10:30 GMT.

The UK gilts have been closely following developments in oil markets because of their impact on inflation expectations, which are well below the Bank of England's target. Crude oil prices recovered on rising consensus that the OPEC will find a way to reduce production. The International benchmark Brent futures rose 1.45 percent to $47.54 and West Texas Intermediate (WTI) jumped 1.34 percent to $46.30.

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.

Investors remain keen to focus on the upcoming economic data and events, highlighted by 10-year gilt auction and Q3 GDP data.

Meanwhile, the FTSE 100 traded 0.49 percent higher at 6,809 by 10:30 GMT. While at 10:00 GMT, the FxWirePro's Hourly GBP Strength Index stood neutral at -21.67 (lower than -75 represents purely bearish trend).