LONDON, Aug 28 (Reuters) - British gilt futures rose on
Thursday buoyed by weak UK house price data and a recovery in
overseas bond markets ahead of U.S. GDP data later in the
session.
Short-dated gilts led the rally after data from the Nationwide building society showed British house prices fell 1.9 percent in the month of August to post their biggest annual drop since records began in 1991.
'The front end seems to be outperforming a bit on the data but the impact of more bad news on the housing market is limited,' said Moyeen Islam, gilts strategist at Barclays Capital.
'What the market wants to know is how much the housing market will affect the real economy.'
At 0825 GMT, the September gilt future <FLGU8> was 24 ticks higher at 109.62, broady in line with Bunds.
Short sterling contracts traded between flat and 3 ticks higher across the strip while yields on 10-year gilts were 2 basis points lower at 4.45 percent.
The Confederation of British Industry releases it August retail sales barometer at 1000 GMT. The consensus of analysts polled by Reuters is for a headline retail sales balance of -30. The balance fell to -36 last month, the weakest reading since the survey began in 1983.
Further weak economic news is likely to add to pressure on the BoE to cut interest rates from 5 percent before the year is out, especially following official data last week showing the UK economy ran out of steam in the second quarter.
* Sep gilt <FLGU8> 109.62 (+0.24)
* Dec short sterling <FSSZ8> 94.245 (UNCH)
* 10-year yield 4.45 percent (-2 bps) --------------------- KEY MARKET DATA--------------------------- Long Gilt futures <0#FLG:> Gilt benchmark chain <0#GBBMK=> Short Stg futures <0#FSS:> Cash market quotes <GB/GILT1> Deposit rates <DM=> Sterling cross rates <GBPX1=> UK debt speedguide <GB/DEBT> Econ. indicator polls<ECI/GB> --------------------KEY MARKET REPORTS-------------------------- Gilts [GB/] Sterling [GBP/] Euro Debt [GVD/EUR] Dollar [USD/] U.S. Treasuries [US/] Debt reports [DBT] -------------------- GILT STRIPS DATA -------------------------- Gilt strips data <GB/STRIPS1> All gilt strips <0#GBSTRIP=> Gilt strips IO <0#GBSTRIPIO=> Gilt strips PO <0#GBSTRIPPO=> A list of all the strippable British gilts <0#GBSTRIPTSY=> --------------------- FOR MORE NEWS ---------------------------- Top British news [TOP/UK] World news [GLANCE/G] UK diary [GB/DIARY] Press reviews [PRESS] New from Reuters [INFO] Useful Speedguides <REUTERS> <PHONE/HELP> <USER/HELP> Keywords: MARKETS BRITAIN GILTS tf.TFN-Europe_newsdesk@thomson.com ra COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
Short-dated gilts led the rally after data from the Nationwide building society showed British house prices fell 1.9 percent in the month of August to post their biggest annual drop since records began in 1991.
'The front end seems to be outperforming a bit on the data but the impact of more bad news on the housing market is limited,' said Moyeen Islam, gilts strategist at Barclays Capital.
'What the market wants to know is how much the housing market will affect the real economy.'
At 0825 GMT, the September gilt future <FLGU8> was 24 ticks higher at 109.62, broady in line with Bunds.
Short sterling contracts traded between flat and 3 ticks higher across the strip while yields on 10-year gilts were 2 basis points lower at 4.45 percent.
The Confederation of British Industry releases it August retail sales barometer at 1000 GMT. The consensus of analysts polled by Reuters is for a headline retail sales balance of -30. The balance fell to -36 last month, the weakest reading since the survey began in 1983.
Further weak economic news is likely to add to pressure on the BoE to cut interest rates from 5 percent before the year is out, especially following official data last week showing the UK economy ran out of steam in the second quarter.
* Sep gilt <FLGU8> 109.62 (+0.24)
* Dec short sterling <FSSZ8> 94.245 (UNCH)
* 10-year yield 4.45 percent (-2 bps) --------------------- KEY MARKET DATA--------------------------- Long Gilt futures <0#FLG:> Gilt benchmark chain <0#GBBMK=> Short Stg futures <0#FSS:> Cash market quotes <GB/GILT1> Deposit rates <DM=> Sterling cross rates <GBPX1=> UK debt speedguide <GB/DEBT> Econ. indicator polls<ECI/GB> --------------------KEY MARKET REPORTS-------------------------- Gilts [GB/] Sterling [GBP/] Euro Debt [GVD/EUR] Dollar [USD/] U.S. Treasuries [US/] Debt reports [DBT] -------------------- GILT STRIPS DATA -------------------------- Gilt strips data <GB/STRIPS1> All gilt strips <0#GBSTRIP=> Gilt strips IO <0#GBSTRIPIO=> Gilt strips PO <0#GBSTRIPPO=> A list of all the strippable British gilts <0#GBSTRIPTSY=> --------------------- FOR MORE NEWS ---------------------------- Top British news [TOP/UK] World news [GLANCE/G] UK diary [GB/DIARY] Press reviews [PRESS] New from Reuters [INFO] Useful Speedguides <REUTERS> <PHONE/HELP> <USER/HELP> Keywords: MARKETS BRITAIN GILTS tf.TFN-Europe_newsdesk@thomson.com ra COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
© 2008 AFX News
