UK gilts slip ahead of BoE Governor Carney’s speech, 30-year auction

The UK gilts slipped Monday as investors wait to watch the Bank of England (BoE) Governor Mark Carney’s speech, scheduled to be held today by 15:00GMT, besides, the 30-year auction, due on September 19, which will add direction to the country’s debt market.

The yield on the benchmark 10-year gilts, rose nearly 1 basis point to 1.31 percent, the super-long 30-year bond yields also climbed near to 1 basis point to 1.90 percent and the yield on the short-term 2-year traded 1-1/2 basis points higher at 0.44 percent by 10:10 GMT.

After the BoE’s MPC struck a much more hawkish note last week – with the policy statement making explicit that the majority on the Committee expects to tighten policy over coming months – Governor Carney’s speech in Washington DC today, which will be followed by Q&A with Christine Lagarde, should be closely watched.

And data-wise, Wednesday’s release of retail sales figures for August will also fuel speculation one way or the other as to whether a hike in Bank Rate is coming in November. An increase in retail sector activity of 0.3 percent m/m in July was driven entirely by food stores, and while we expect to see that non-food sales picked up last month to leave overall sales rising, growth looks set to have remained modest in line with the subdued trend seen in recent months.

Meanwhile, the FTSE 100 traded 0.29 percent higher at 7,239.75 by 10:40 GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at 57.85 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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