UK gilts surge despite better-than-expected growth in average wages in May; June CPI eyed

The United Kingdom’s gilts surged during European trading hours Tuesday as investors turned deaf towards a stronger-than-expected growth in average wages for the month of May as participants still await the results of the country’s consumer price inflation (CPI) for the month of June, scheduled to be released on July 17 by 08:30GMT.

The yield on the benchmark 10-year gilts, slumped 2 basis points to 0.781 percent, the 30-year yield rose suffered 1-1/2 basis points to 1.393 percent and the yield on the short-term 2-year too traded 1-1/2 basis points down at 0.557 percent by 11:00GMT.

On the face of it, the latest British jobs report for May did little to change the narrative that the labour market is tight and either close to or at full employment. Employment continued to rise, the unemployment rate held at a 44-year low, and measures of pay growth (total and regular) both accelerated, Lloyds Bank reported.

However, the details of the report highlight some less positive compositional trends, which suggest that growing uncertainty over the longer-term outlook may be having a more noticeable impact on labour market activity, the report added.

Meanwhile, the FTSE 100 remained tad 0.42 percent higher at 7,563.45 by 11:05GMT