Gilt have had a relatively choppy......>

GILT SUMMARY: Gilt have had a relatively choppy session squeezing higher in the

morning, then reversing gains as NY opened, only for them to recover some of the

lost ground to finish mixed, but with the yield curve flatter. 2s/10s is 0.7bp

flatter while 2s/30s is 1.5bp flatter.

- 2-yr Gilt yield is +0.5bp at 0.81%, 5-yr +0.4bp at 1.134%, 10-yr -0.3bp at

1.433%, 30-yr -1.1bp at 1.797% & 50-yr -1.2bp at 1.581%, according to Tradeweb

- Despite soft US housing data, rumours of a US think tank on Fed leaning to 4

rate hikes this year weighed heavily on Gilts especially the short-end and

pushed them to session low.

- However concerns raised by the Bank of England that there has been a lack of

progress in tackling the servicing of derivative contracts post Brexit gave some

support to the recovery of Gilts in afternoon trade.

- Breakevens are mixed with 5-yr 0.8bp wider while 10-yr is 1.1bp tighter. 

- Attention is also turning to a raft of UK data next week and two key risk

events with the BoE monetary policy decision on Thursday and then the EU summit

meeting on Thur/Fri with the UK hoping a transitional deal can be agreed.