After a a positive start Gilts have....>

GILT SUMMARY: After a a positive start Gilts have faded lower in wake of tick

higher in average weekly earnings and shape selling seen in US Treasuries and

German Bunds. Yield curve is ever so slightly steeper with 2s/30s 0.3bp wider.

- 2-yr Gilt yield is +2.3bp at 0.441%, 5-yr +2.5bp at 0.759%, 10-yr +2.6bp at

1.309% and 30-yr +2.7bp at 1.880% according to Tradeweb.

- Gitls opened modestly higher, underpinned by continued concern over Brexit

(LSE warning transition deal needs to be agreed by year end otherwise financial

firms will start leaving), however, faded the move as market looked ahead to key

UK labour Market Survey.

- Tick higher in AWE ex-bonus seemed to be the catalyst for selling in Gilts,

which was then picked up by UST market which sold off heavily as Yen weakened

against the US Dollar. A block sell of 1k Gilts future at 124.65 also weighed.

- Another bout of selling in German Bunds and spike in equities pushed Gilts to

intra-day lows, although some light buying enable them to pare losses.

- 2-yr swap spreads have tightened sharply following 2-days of moving higher and

are back below 36bps. While 10-yr & 30-yr breakevens are circa 2bp tighter