Bank of England Governor Mark Carney...>

GILT SUMMARY: Bank of England Governor Mark Carney put some life back into the

Gilt market just before midday, pushing the 10-yr yield below 1.30% for the

first time since Sep 19. The very front end of the money market curve remained

relatively anchored though with markets pricing a near 85% chance of a rate hike

in November.

- Carney, speaking in front of the Treasury Select Committee said that "Building

a war chest in interest rates for future shocks would not be in-line with

inflation target" and that inflation is likely to peak in a couple of months.

This cause a number of upside-stops to be triggered in G Z7 future.

- Along with comments from BoE new-comer David Ramsden that he was not part of

the MPC majority who thought rates should rise in 'coming months' and Silvana

Tenreyro being data dependant, markets took an overall dovish view and pushed

long-end rates sharply lower.

- 2-yr Gilt yield is -4.1bp at 0.412%, 5-yr -5.8bp 0.729%, 10-yr -5.9bp 1.279%

and 30-yr -4.5bp at 1.848% according to Tradeweb.

- Swaps spreads are wider led by the 2-yr to 10-yr sector.