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BEAR STEEPENING

GILT SUMMARY

Gilts remain offered with yields at the longer end holding towards the top end of the day's range.

  • The Sep-20 gilt future trades at 136.85, 11 ticks off the days low.
  • Cash yields are 1-4bp higher on the day with the longer end underperforming. Last yield levels: 2-year 0.0075%, 5-year -0.0067%, 10-year 0.2344%, 30-year 0.7720%.
  • The DMO earlier sold GBP2.75bn of the 0.125% Jan-28 gilt with a further GBP687.5mn taking up through the PAOF.
  • Data published earlier in the morning confirmed that the UK economy has posted a record quarterly contraction in Q2. While monthly data for June suggest economic activity is picking up, there remains a vast loss of output still to be recovered.
  • The publication of the July RICS House Price Balance data will mark the end of this week's UK economic data releases.

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