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Bear Steepening

GILT SUMMARY

Following a strong start, gilts have sold off through the session and the curve has bear steepened while global equities have broadly pushed higher and G10 FX have gained against the USD.

  • Gilts yields are now 1-4bp higher on the day. Last yields: 2-year 0.1377%, 5-year 0.3906%, 10-year 0.7786%, 30-year 1.2402%.
  • The Sep-21 gilt future has traded down to 127.45, 9 ticks above the day's low.
  • The short sterling futures strip has slightly steepened with whites/reds down 0.5-1.5 ticks and greens/blues down 1.0-2.0 ticks.
  • The BoE purchased GBP1.147bn of short-dated gilts with offer-to-cover of 3.88x.
  • The focus this week will be on preliminary PMI data for June which will be published on Wednesday and the BoE MPC meeting on Thursday.

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