Bonds: Gilts weaker ahead of MPC and after poor RBS covered bond sale

These were the movements in some of the most widley-followed 10-year sovereign bond yields:

US: 2.41% (+2bp)
UK: 1.20% (+6bp)
Germany: 0.43% (+1bp)
France: 0.87% (+2bp)
Italy:2.28% (+4bp)
Spain: 1.62% (+3bp)
Greece: 5.65% (-3bp)
Portugal: 3.44% (+3bp)
Japan: 0.04% (+1bp)

Gilts underperformed by a wide margin as RBS sold covered bonds at a discount to those of its peers, possibly highlighting some of the impending costs of Brexit.

The lender sold €1.25bn of seven-year debt backed by mortgages at ten basis points over prevailing market interest rates, versus two basis points on average for its peers.

On a cheerier note, ahead of the MPC's policy meeting on the following Thursday business lobby group BRC said like-for-like retail sales jumped at a 5.6% year-on-year pace in April - their fastes clip since April 2011.

Acting as a backdrop, investors were waiting on more Fedspeak, with Minneapolis Fed President Neel Kashkari due to talk at the Minnesota High Tech Spring Conference later in the day, while Boston Fed President Eric Rosengren was due to make a speech at the NYU Stern School of Business.

In addition, Dallas Fed President Rob Kaplan was to appear in a moderated discussion at the Dallas Regional Chamber.