Gilts are heading into Thursday's......>

GILT SUMMARY: Gilts are heading into Thursday's close mixed, yield curve steeper

as the short-end rallies in reaction to a dovish taper by the ECB and extra

measures to keep rates lower for longer in the Eurozone.

- 2-yr Gilt yield is -0.8bp at 0.499%, 5-yr -1.1bp at 0.844%, 10-yr -0.4bp at

1.406% and 30-yr +0.6bp at 1.961% according to Tradeweb.

- Gilts meandered in the morning, waiting on the ECB decision, however the

short-end rallied in reaction to distributive trades survey that showed a net of

-36 retailers reported a fall in sales volumes in October compared to last

month's 2-yr high of +42%.

- Dec Gilts spiked to session high in reaction to ECB monetary policy decision,

which confirmed a 9-month extension to QE at E30bln p/m, that it was opened

ended, no change in forward guidance and sequencing and recovery is not

self-sustaining.

- The future pared gains in light volume as markets took profits, but then found

new support, before falling once again on news US house approve budget measures.

- Breakevens are circa 1.5bp tighter while swap spreads are mixed, 2-yr +2.4bp.