UK gilts surge ahead of May labour market data, BoE Governor’s speech

The United Kingdom’s gilts surged during European trading session Monday as investors wait to watch the country’s labour market data for the month of May, scheduled to be released on July 16 by 08:30GMT and the Bank of England (BoE) Governor Mark Carney is also due to deliver a speech on the same day by 12:00GMT, which shall render some specific direction to the debt market.

The yield on the benchmark 10-year gilts, slumped 2-1/2 basis points to 0.810 percent, the 30-year yield rose also plunged 2-1/2 basis points to 1.415 percent, and the yield on the short-term 2-year too traded nearly 2-1/2 basis points lower at 0.573 percent by 09:55GMT.

After a quiet end to the week for UK economic news, the coming week will bring a number of top-tier releases, kicking off tomorrow with the latest employment and wage figures for May.

"We would expect some payback in May, although the three-month jobs growth number is likely to have remained positive. Having slowed to a seven-month low in April, wage growth will also be closely watched with an eye on BoE policy," Daiwa Capital Markets reported.

"We expect Wednesday’s inflation release to show the headline and core CPI rates moving sideways in June, at 2.0 percent y/y and 1.7 percent y/y respectively. That day will also bring the ONS’s house price index for May, as well as the BoE’s latest quarterly credit conditions survey. Focus on Thursday, meanwhile, will be on June’s retail sales figures, which will provide further insight into household consumption in the second quarter. We expect a third consecutive monthly decline to conclude a weak performance on the High Street in Q2. Finally, Friday will bring the latest public finance figures for May," the report further noted.

Meanwhile, the FTSE 100 remained tad -0.18 percent lower at 7,492.50 by 10:00GMT.