Gilts are trading mixed with yield.....>

GILT SUMMARY: Gilts are trading mixed with yield curve steepening following

latest UK labour data which showed a less than expected rise in the average

weekly wage despite surprise fall in the unemployment rate.

- 2-yr Gilt yield is -0.9bp at 0.915%, 5-yr +0.3bp at 1.210%, 10-yr +0.9bp at

1.474%, 30-yr +1.2bp at 1.849% and 50-yr +1.4bp at 1.659% according to Tradeweb.

- June Gilt future actually opened a few ticks higher, but quickly reversed

course and eventually hit session low of 121.48 following a Gilt block sell of

1k at 121.47, on market positioning ahead of UK labour data, expecting real

wages to finally move positive in over a year and hit 3% rate of growth.

- The market was left disappointed though as wage growth remained steady at

2.8%, which was just enough to leave real wages at 0.1%. The markets pretty much

ignored the 0.1% fall in the ILO 3-mth unemployment rate to 4.2%.

- This helped support recovery in the short end of the curve as markets pared

back expectations of higher BoE interest rates.

- 5-yr breakevens are 0.9bp tighter while 10s and 30s are little changed. Swap

spreads are mixed but little changed.