Gilts are trading mixed with the.......>

GILT SUMMARY: Gilts are trading mixed with the belly of the yield curve little

changed, however the wings (2-yr and 30-yr) are modestly higher despite a

disappointing 30-yr Gilt re-opening auction.

- 2-yr Gilt yield is -0.7bp at 0.415%, 5-yr unchanged at 0.732%, 10-yr +0.3bp at

1.305% and 30-yr -0.4bp at 1.902% according to Tradeweb.

- Gilts opened little changed from Monday's closing levels due to lack of

direction seen overnight in Asia. However, markets were waking up to a Times

article reporting that there will be a special cabinet meeting on Thursday ahead

of May's key Brexit speech on Friday in Florence. The move seen to get some sort

of government consensus on Brexit strategy.

- There was some receiving in 5y5y and 10y5y swaps earlier which helped push

Gilts higher, while 30-yr yield dropped 3bp before its re-opening auction.

- An increase in the tail and drop in cover at the auction weighed on Gilts

though with the 30-yr paring gains by 2bps.

- 30-yr breakevens are 1.7bp wider while swap spreads are little changed