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BRAZIL

Precatorios Bill May Be Voted On This Thursday

FED

Chairman Powell

EURJPY TECHS

Resumes Its Downtrend

USDJPY TECHS

Testing Its 50-Day EMA

GILT SUMMARY
GILT SUMMARY: Gilts are holding onto modest gains, yield curve flatter as ultra
long-end outperforms the rest of the curve, underpinned by China and domestic
growth concerns and divisions within Europe.
- 2-yr Gilt yield is -2.4bp at 0.721%, 5-yr -3.2bp at 1.016%, 10-yr -4bp at
1.63%, 30-yr -4.4bp at 1.727% and 50-yr -4.4bp at 1.562%.
- Gilts opened little changed but then rose higher on the back of the Bund rally
as division within Europe on immigration and reform became more open/vocal.
Concerns over domestic retailers also added to worries for the the UK economy as
John Lewis announced a profits warning.
- The BoE Financial Stability Report highlighted global risk were elevated and
rising and that level of debt in China was a cause for concern. Carney also
warned that global interest rates were at risk of a snapback.
- There was some encouraging news on Brexit though which weighed on gilts with
Ireland's Coveney saying that draft conclusions on Brexit were 'very strong'.
- Sstg strip has ticked higher by 1 to 3 ticks with curve pretty much shifting
lower. 30-yr Breakeven is 1.4bp tighter, but swap spreads little changed.