Gilts are trading mixed following......>

GILT SUMMARY: Gilts are trading mixed following decent 2-way flow following

comments from BoE Governor Mark Carney with the yield curve bear flattening as

short-end seen weighed by higher possibility of an August rate hike.

- 2-yr Gilt yield is +2.0bp at 0.750%, 5-yr +1.5bp at 1.035%, 10-yr +0.8bp at

1.285%, 30-yr -0.2bp at 1.732% & 50-yr -0.4bp at 1.582% according to tradeweb

- Gilts opened lower, with yield curve shifting higher by around 1.5bps as

markets digested latest Brexit news and Bloomberg ECB sources story.

- Sep Gilt future then gradually pared losses following French and Spanish bond

supply before crashing to fresh session low in initial reaction to BoE Carney

comments -- Data suggest domestic cost pressure rising, more confident Q1 UK

softness largely due to weather and slack is largely used up.

- 10-yr part of the yield curve just as quickly pared losses while ultra

long-end reversed downside move leaving the short-end close to session lows as

markets looked to flatten the curve.

- White and red short sterling strip is underperforming greens/blues, falling

between 1.5 and 3 ticks. While 5-yr and 30-yr breakevens are 0.5bp wider.