Gilts are trading modestly mixed on....>

GILT SUMMARY: Gilts are trading modestly mixed on back of upbeat Eurozone flash

PMIs, but are off session lows in wake of strong 5-year Gilts re-opening

auction.

- 2-yr Gilt yield is -0.7bp at 0.204%, 5-yr -1.1bp at 0.479%, 10-yr unch at

1.084% and 30-yr +0.1bp at 1.743% according to Tradeweb

- Gilts opened little changed but then dipped lower, seen weighed by payer in 7Y

and 9Y swaps, each above Stg130mln and as markets prices in concession ahead of

5-yr gilt re-opening auction. Upbeat Eurozone PMIs then also weighed on

sentiment.

- Markets also picked up on press reports that the UK Government is expected to

say later today that it does not want the European Court of Justice (ECJ) to

have "direct" jurisdiction over the UK. Some seeing this as a slight compromise

and could pave the way for negotiations to progress next week.

- Demand at 5-yr Gilt supply coming in above average of last 6 auctions and tail

falling below avg then supported recovery in Gilts. 

- Recovery in German Bunds then supported another bid in Gilts.