UK gilts slump after April retail sales surpass market expectations; investors eye BoE Governor Carney’s speech

The UK gilts slumped Tuesday after the country’s retail sales for the month of April beat market expectations as well as rebounding from the last release in March. Investors will now be focussing on the Bank of England (BoE) Governor Mark Carney’s speech, scheduled to be held today for further direction in the debt market.

The yield on the benchmark 10-year gilts, rose 1 basis point to 1.44 percent, the super-long 30-year bond yields traded tad higher at 1.87 percent and the yield on the short-term 2-year traded 1 basis point higher at 0.78 percent by 09:50GMT.

The country’s retail sales climbed 1.6 percent from March, compared with a median estimate of a 0.9 percent gain in a Bloomberg survey. The surge was led by fuel, household goods and clothing, data released by the Office for National Statistics showed in London.

After cold weather hit sales at the start of the year, the Bank of England is looking out for a recovery in consumption as it debates when to next raise interest rates. Britons are just now emerging from a year of shrinking real incomes after the vote to leave the European Union battered the pound and stoked inflation, Bloomberg reported.

Meanwhile, the FTSE 100 traded 0.07 percent lower at 7,783.88 by 09:50 GMT, while at 09:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at -11.73 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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