10-yr Gilt yield has remained..........>

GILT SUMMARY: 10-yr Gilt yield has remained relatively steady and close to

intra-days lows in London afternoon session, while the rest of the curve has

ticked higher narrowing/widening the earlier gap with the 10-yr Gilt. UK 2s/10s

has narrowed to 66.5bp from 68.4, while 10s/30s has widened to 42.2bp from

40.3bps. 

- 2-yr Gilt yield -5.5bp at 0.78%, 5-yr -6.9bp at 1.132%, 10-yr -7.8bps at

1.443%, 30-yr -5.9bps at 1.87% and 50-yr -5.6bps at 1.67% according to Tradeweb.

- Majority of the rally in Gilts was seen in first hour of trade as markets

traded with risk-off sentiment for a number of reasons and led to there being

very little reaction to downward surprise to UK April inflation.

- Red and Green short sterling contracts have seen extra buying in the afternoon

as well, while blue contracts have remained steady and white contracts some

selling. MNI PINCH now see markets pricing in just 41% chance of a BoE rate hike

in August and 76% in November.

- Breakevens have tightened by circa 2.5bps, while swap spreads are 2bp wider.

- Tomorrow sees DMO tap 20-yr IL Gilt and UK April retail sales data.