UK gilts slump despite worse-than-expected December retail sales data; Brexit chaos continue to bother

The United Kingdom’s gilts slumped during Friday’s afternoon session despite a worse-than-expected retail sales data for the month of December, released today amid the ongoing Brexit chaos, followed by PM May’s survival of the no-confidence vote on Wednesday.

The yield on the benchmark 10-year gilts, jumped 2 basis points to 1.356 percent, the super-long 30-year bond yields also surged 2 basis points to 1.872 percent and the yield on the short-term 2-year traded tad higher at 0.824 percent by 10:50GMT.

The end of an exhausting week for Brexit news seems unlikely today to bring any breakthrough ahead of Monday’s deadline for the submission to Parliament of the Theresa May’s Plan B.

Of course, the key date now will be January 29, when MPs will get an opportunity to vote on, and amend, the Government’s proposals. Today’s UK dataflow, meanwhile, brings the latest retail sales figures. Some major retailers reported relatively decent festive period sales.

But, with consumer confidence having taken a turn for the worse towards the end of the year, overall High Street momentum appears to be weak. And consistent with the subdued results of the latest retail sector surveys such as the BRC’s, today’s figures will probably show a drop in sales – expectations are for a decline of nearly 1 percent m/m, which would leave sales in Q4 only slightly higher compared to Q3, Daiwa Capital Markets reported.

Meanwhile, the FTSE 100 jumped 1.21 percent to 6,918.64 by 10:55GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained slightly bullish at 81.37 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex