Gilts are trading higher and near session.....>

GILTS: Gilts are trading higher and near session highs as UK labour data comes

in-line with expectations and leaves Bank of England on track to hike rates at

their next MPC meeting in August. Brexit concerns though remain in the

background. 10-yr part of the yield curve is leading the charge.

- 2-yr Gilt yield is -1.1bp at 0.749%, 5-yr -1.6bp at 1.029%, 10-yr -2.2bp at

1.271%, 30-yr -1.6bp at 1.730% & 50-yr -1.4bp at 1.583% according to Tradeweb.

- The rise in pay pressures did not materialize in May with average weekly

earnings ex bonus slipping to 2.7% from 2.8% and undershooting BoE forecasts,

however, the rise in employment in the 3-months to May was a larger than

expected 137k. Overall data pointed to steady growth which is seen leading the

MPC raising rates on Aug 2.

- Elsewhere the OBR released it latest fiscal sustainability report that showed

that the outlook for public finances is worse than last year, largely due to

announcement of extra funding for the NHS last month. 

- Sstg strip is 1 to 3 ticks higher, curve touch flatter as blue contracts

outperform reds/greens.