Gilts are set to close mixed Tuesday...>

GILT SUMMARY: Gilts are set to close mixed Tuesday with yields between 2-yr and

10-yr part of the curve grinding higher (curve bear flattening), while above

10-yr yields have ticked lower albeit in light illiquid month-end trade.

- 2-yr Gilt yield is +0.9bp at 0.456%, 5-yr +0.4bps at 0.776%, 10-yr +0.2bps at

1.329% and 30-yr -1.3bp at 1.894% according to Tradeweb.

- The short to middle end of the curve started coming under pressure in the

afternoon and reversed opening light gains following US employment cost index

that inched higher to 0.7% as expected, and then remained in lower range in wake

of strong MNI Chicago report.

- The ultra long-end though has remained relatively bid as soft Eurozone CPI,

has combined with further fall in UK GfK consumer confidence, news that

Chancellor Hammond will not break his fiscal rules to increase public spending

and the BBC report that the BoE told banks to prepare for "no deal" on Brexit

and thinks 75k jobs could be lost.

- Breakevens are trading wider with 5yr +2.4bp, 10-yr +1.7bp and 30-yr +3.1bp.

Swaps spreads on the other hand are little changed on the day.