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Retail sales in the U.K. were "dismal" in June, with declines across multiple sectors and the outlook for the consumer uncertain, Kathleen Brooks, research director at XTB, says in a note. There has been no discernible trend in retail sales this year, with the increasingly wet weather hurting sales for the first half of 2024, she says. The outlook for consumers is mixed, with inflation contained and wage growth remains elevated, but the prospect of Bank of England rate cuts still some way off, she says. "We will have to see if better weather in July, England reaching the finals of Euro 2024 and the eradication of election uncertainty enticed shoppers to spend in July," Brooks adds. ([email protected])
BlueBay has maintained conviction in a two- to 30-year U.S. Treasury yield curve steepening trade and continues to believe that this position has room to perform further, notwithstanding recent curve moves in this direction, Mark Dowding, chief investment officer for fixed income, says. "That said, our conviction is now more that this will manifest through longer-dated yields rising from current levels than from short-dated maturities rallying further," he says. Broadly speaking, this leaves BlueBay--a unit of RBC BlueBay Asset Management--skewed toward fading the recent rally in Treasury yields, he says. The two-year U.S. Treasury yield is trading at 4.505%, while the 10-year yield is trading at 4.447%, according to Tradeweb. ([email protected])
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