Gilts are stuck in a lower bound.......>

GILT SUMMARY: Gilts are stuck in a lower bound range ahead of NY session and ECB

monetary policy decision, having opened lower on the back of overnight fall in

US Treasuries.

- 2-yr Gilt yield is +0.1bp at 0.1725%, 5-yr +1.5bp at 0.428%, 10-yr +1.7bp at

1.024% and 30-yr +1.4bp at 1.686% according to Tradeweb.

- Gilts were under pressure from the get-go with markets seen trading with a

mild risk-on tone following US President trump agreeing with the Democrats to a

3-month debt ceiling extension and newswire reports that Trump told China's

President Xi that military action on North Korea is "not our first choice".

- However there is a Stg23.4bln (net of BoE & DMO holdings) redemption and

Stg4.8bln worth of coupon payments today which are seen supporting Gilts.

- Attention is seen firmly on ECB GC monetary policy decision and press

conference this afternoon. While in the UK the second reading of the Brexit

Repeal Bill is heard in the House of Commons.

- There appeared to be a payer of Stg89mln 10-yr swap as swap spreads have

tightened so far today, with 2-yr -3bp and and 10-yr -1.5bp