UK gilts trade mixed after August retail sales beat consensus estimates

The United Kingdom’s gilts traded mixed during European session Thursday after the country’s August retail sales figures cheered market expectations, albeit down from the previous reading in July, revised higher.

The yield on the benchmark 10-year gilts, hovered around 1.605 percent, the super-long 30-year bond yields slumped nearly 2 basis points to 1.940 percent and the yield on the short-term 3-year traded tad higher at 0.895 percent by 09:40GMT.

The country’s retail sales rose 0.3 percent in August, the Office for National Statistics said on Thursday, compared to a 0.9 percent increase in the previous month. Economists had forecast a 0.1 percent drop. Further, retail sales rose by 3.3 percent on a y/y basis last month, vs analysts prediction for a 2.3 percent gain.

Sales in July advanced 3.8 percent from the year before. Core retail sales, which exclude automobile sales and fuel, increased by 0.3 percent in August, after rising 1.1 percent a month earlier. Economists had expected a 0.2 percent decline. Year-on-year, core retail sales rose 3.5 percent in August, compared to expectations for a 2.5 percent increase. A month earlier, they registered a 4.0 percent advance which was revised up from an initial 3.7 percent rise.

Meanwhile, the FTSE 100 rose 0.15 percent to 7,344.49 by 09:45GMT, while at 09:00GMT, the FxWirePro's Hourly Pound Strength Index remained slightly bullish at 81.31 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex