UK gilts slump as investors await August manufacturing production, trade balance data

The United Kingdom’s gilts slumped during Tuesday’s afternoon session a investors await the country’s manufacturing production for the month of August and trade balance data, scheduled to be released on October 10 by 08:30GMT respectively.     

The yield on the benchmark 10-year gilts, jumped 3 basis points to 1.705 percent, the super-long 30-year bond yields surged 2-1/2 basis points to 2.023 percent and the yield on the short-term 2-year traded 1-1/2 basis points higher at 0.897 percent by 09:40GMT.

Having stepped up their spending during the spring and summer heatwave, British households appear to have become more circumspect about their outlays heading into the autumn – perhaps unsurprising as Brexit uncertainties loom ever larger. According to the BRC retail survey, released overnight, total spending on the High Street rose 0.7 percent y/y in September, the softest rate of increase since last October excluding the dip in April related to the timing of Easter this year, Daiwa Capital Markets reported.

On a like-for-like basis, sales appeared weaker still, down 0.2 percent y/y, again the second weakest since October 2017. Within the detail, sales remained boosted by a relatively firm trend in food sales, up 2.3 percent 3m/y on a like-for-like basis. But non-food sales were down a hefty 1.6 percent 3m/y on the same basis, suggesting a diminished willingness to make non-essential purchases, the report added.

Meanwhile, the FTSE 100 slipped 0.08 percent to 7,227.25 by 09:50GMT, while at 09:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bullish at 102.56 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex