Gilt futures notched up their third consecutive session of gains to touch a two-week high as weak UK retail sales data eased fears of a near-term interest rate rise.
Official figures for July showed a 0.3 per cent decrease in retail sales, in contrast to economists’ expectations of a 0.2 per cent increase. Those numbers left all apart from ultra-long maturities with gains on the day, with Treasury 4¼ per cent 2011 up 13p to £97.75 and Treasury 6 per cent 2028 18p ahead at £122.51. The September gilt future improved 22p to £109.28 on turnover in 73,000 contracts, producing the busiest session this week.
Elsewhere, bunds were bolstered by a downward revision to June’s eurozone inflation figures.
Among corporate bonds, Lloyds TSB added to its Tier 1 capital by selling £600 million of variable perpetual bonds through Saphir Finance, a special purpose vehicle. The bonds, sold by Lehman Brothers, pay a 6.37 per cent coupon until 2015.