EGBS: 10-year BTP Yields Eyeing Convergence With OATs

Some of the benchmark long end UK yields are near/threatening clean breaks of key technical support levels.

• 10-Year gilt yields have pulled back towards the uptrend drawn off the Dec ’21 lows, printing as low as 4.531%. Uptrend support intersects at 4.517% today.
• 30-Year gilt yields have breached their equivalent trendline (5.259%), trading as low as 5.245%. Gilt bulls will look to force a close below that level. Next yield support comes in at the April 30 low (5.181%), followed by the April 7 low (5.044%).
• Moving average setups in both benchmarks are not biased towards lower yield levels at this stage, with the simple 50-DMA above both the 100- & 200-DMA in both instances.

Johnson Redbook retail sales showed some signs in slowing the first week of June, rising 4.7% Y/Y (week ending Jun 7), vs a targeted gain of 5.7%.

• A continued rise at the current pace would mark the softest month since January, and a continued deceleration from 6.7% in April (was 5.5% in May).
• May's Census Bureau retail sales (out next Tuesday) is seen printing 0.0% M/M after 0.1% in April. Roughly speaking that would translate into 4.8% Y/Y growth, after 5.2% in the prior two months, so also reflecting an early summer slowdown. All of these series are in nominal terms.
• The report notes that shoppers are becoming more "price-conscious" in light of tariffs: "Sales leader lists were more varied than in recent weeks, with slightly less emphasis on seasonal buying. As tariffs take effect, warehouse and discount stores are gaining popularity as shoppers become more price-conscious.  June represents the peak of the retail business period, leading up to traditional July clearance sales and making it a crucial month for most retailers. Weather conditions will play a key role in helping stores recover any lost sales before the margin-reducing clearance season begins. Retailers expect the impact of Father's Day to unfold over the course of this week, while Independence Day falls in the fifth week of June on the retail calendar."

You are invited to listen to a Livestreamed MNI Connect Video Conference with the San Francisco Fed President Mary Daly.

Details below:

• Mary Daly joins us to discuss the ‘The US Economic Outlook and Challenges for Policymakers'
• DATE: Thursday, 10 July 2025
• TIME: 2:30 pm - 4 pm ET; 11:30am - 1pm PT; 7:30pm - 9pm London
• This event will be run as a Zoom Webinar and is a public, on-the-record event.

To register please go to: MNI Webcast Registration