Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
The U.K Gilts plunged on Wednesday after data showed stronger than expected April labour market data. Also, investors drove-out from safe-haven buying as Brexit angst eased after YouGov EU referendum poll for the Times newspaper showed that maximum participants voted against leaving European Union. The yield on the benchmark 10-year bonds rose 3bps to 1.400 pct and the yield on 2-year bonds jumped 2bps to 0.406 pct by 1000 GMT.
The April Claimant Count came at -2.4k, against market consensus of 4.3k, from prior 6.7k (revised to 14.7k). Similarly, March Unemployment rate remained unchanged at 5.1 pct, in the line of market consensus of 5.1 pct. Average weekly earnings rose 2.0 pct y/y, higher than the market expectation of 1.7 pct and average earnings (ex-bonus) rose 2.1 pct consensus was for 2.3 pct rise.
In the latest YouGov EU referendum poll for the Times newspaper support to 'Remain' is on 44% and to 'Leave' is on 40%. Also, the survey by the ORB for the Telegraph newspaper uncovered an increase in support among all respondents to stay in the Union at 55 pct whilst those in the leave camp have tumbled to 40 pct. In the April survey the voting was 51-43 pct individually. However, among only those who say they will definitely vote the share narrows to 51-45 pct in favour of remain.
Moreover, the British 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. Today, crude oil prices tumbled on profit booking and surging dollar, but hovering at record high of $49 per barrel after the American Petroleum Institute reported that U.S. crude supplies fell by 1.1 million barrels for the week ended May 13. Reuters in its recent report said that supply disruptions from Nigeria, Venezuela, the United States and China triggered a U-turn in the oil outlook of Goldman Sachs, which long warned of overflowing storage and another looming crash in prices. Venezuela's oil production has already fallen by at least 188,000 barrel per day (bpd) since the start of the year as PDVSA struggles to make the investment needed to keep output steady. In the United States, crude production has fallen to 8.8 million bpd, 8.4 pct below 2015 peaks as the sector suffers a wave of bankruptcies. And in China, output fell 5.6 pct to 4.04 million bpd in April, compared with the same time last year. Meanwhile, the International benchmark Brent futures fell 0.53 pct to $49.03 and West Texas Intermediate (WTI) dipped 0.27 pct to $48.18 by 0900 GMT.
Last week, the Bank of England left its policy rate unchanged at 0.50 pct, as expected and this decision was made from MPC 9-0 votes. The Bank of England's Monetary Policy Committee (MPC) sets monetary policy to meet the 2 pct inflation target and in a way that helps to sustain growth and employment. At its meeting ending on 11 May 2016 the MPC voted unanimously to maintain Bank Rate at 0.5 pct. The Committee also voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion. Twelve-month CPI inflation increased to 0.5% in March but remains well below the 2% inflation target. This shortfall is due predominantly to unusually large drags from energy and food prices, which are expected to fade over the next year. Core inflation also remains subdued, largely as a result of weak global price pressures, the past appreciation of sterling and restrained domestic cost growth.
The markets will now focus on the April Retail sales on Thursday (0830 GMT). Meanwhile, The FTSE 100 fell 0.26 pct or 15.77 points to 6,152 by 1000 GMT.
