UK gilts surge on better-than-expected October consumer price inflation; retail sales data in focus

The UK gilts surged during Wednesday’s afternoon session after the country’s consumer price inflation for the month of October impressed market participants, albeit remaining unchanged from that in September.

Also, investors will keep a close eye on Britain’s retail sales data for the month of October, scheduled to be released on November 15 by 09:30GMT for further direction in the debt market.

The yield on the benchmark 10-year gilts, slumped 3-1/2 basis points to 1.488 percent, the super-long 30-year bond yields plunged nearly 3-1/2 basis points to 1.952 percent and the yield on the short-term 2-year traded 1 basis point lower at 0.787 percent by 10:00GMT.

According to data released by the Office for National Statistics (ONS), the UK’s consumer price index remained steady at 2.4 percent in October, compared to market expectations for a rise to 2.5 percent. The producer price index, meanwhile, fell to 0.8 percent, again topping market expectations of 0.6 percent while the retail price index remained steady at 3.3 percent, behind expectations of a rise to 3.4 percent.

Meanwhile, the FTSE 100 traded 0.84 percent lower at 6,994.76 by 10:05GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at 70.931 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex