UK gilts slump on profit-booking, investors shrug off lower-than-expected retail sales

The UK gilts slumped Friday as investors cashed in profits on the last trading day of the week after markets largely shrugged off worse-than-expected retail sales data. Also, the Q4 gross domestic product, due to be released next week remains in focus for further direction in the debt market.

The yield on the benchmark 10-year gilts, which moves inversely to its price, rose nearly 3-1/2 basis points to 1.44 percent, the super-long 30-year bond yields also moved higher by 3-1/2 basis points to 2.08 percent while the yield on short-term 2-year remained flat at 0.20 percent by 10:10 GMT.

U.K. retail sales fell at the fastest pace in almost five years in December as rising prices saw consumers buy less of everything from household goods to clothing and food. The volume of goods sold in stores and online fell 1.9 percent from November, the Office for National Statistics said on Friday. That was the biggest drop since April 2012 and far exceeded the modest decline predicted by economists. Sales excluding auto fuel fell 2 percent.

Lastly, markets will now look forward to the release of Q4 GDP, scheduled next week, while the Bank of England is scheduled to hold its first monetary policy meeting on February 2.

Meanwhile, the FTSE 100 rose 0.01 percent to 7,208.30 by 10:20 GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained neutral at 49.67 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex