UK gilts plunge following higher-than-expected rebound in February retail sales

The UK gilts plunged Thursday, after reading higher-than-expected rebound in the country’s retail sales during the month of February.

The yield on the benchmark 10-year gilts, which moves inversely to its price, jumped 1-1/2 basis points to 1.19 percent, the super-long 30-year bond yields also climbed nearly 1-1/2 basis points to 1.76 percent and the yield on the short-term 2-year traded 3-1/2 basis points lower at 0.14 percent by 09:40 GMT.

U.K. retail sales rose more strongly than expected in February but the outlook for the British consumer remains weak. The volume of goods sold in stores and online jumped 1.4 percent, beating the 0.4 percent gain predicted by economists, Office for National Statistics figures published Thursday show. It left sales down 1.4 percent in the latest three months, the biggest quarterly drop since early 2010.

The UK gilts have been closely following developments in oil markets because of their impact on inflation expectations. The International benchmark Brent futures moved higher by 0.75 percent to USD51.02 and West Texas Intermediate (WTI) rose 0.54 percent to USD48.36 by 10:00 GMT.

Meanwhile, the FTSE 100 fell 0.12 percent to 7,316.00 by 10:00 GMT, while, the FxWirePro's Hourly Pound Strength Index remained slightly bullish at 75.56 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex