Gilts are trading sharply lower with...>

GILT SUMMARY: Gilts are trading sharply lower with the yield curve steepening as

markets unwind last weeks risk-on flows, newswires report of possible North

Korea denuclearisation and 30-yr Gilt supply.

- 2-yr Gilt yield is +3.8bp at 0.842%, 5-yr +4.9bp at 1.202%, 10-yr +6.4bp at

1.56%, 30-yr +6.2bp at 1.97% and 50-yr 6.3bp at 1.751%.

- Gilts were lower from the get-go weighed by overnight news of republican

criticism of Trump's plan to impose tariffs and possible create a trade war.

Gilts then slipped lower pressured by unwind of Italy bearish trades and

upcoming 30-yr Gilt supply which some said needed concession built in.

- 30-yr auction came in solid with tail dropping to 0.2bp from 1bp and demand

rising, however, continued rally in EMU periphery bonds and then newswire

headlines that N.Korea can discuss denuclearisation if regime safety agreed,

with plans to hold talks with South Korea in "late April", led to a sharp

sell-off in Gilts, Bund and Us Treasuries.

- 30-yr Breakeven is 1.9bp wider at 3.42%, while swap spreads are mixed with

2-yr to 3-yr 1-2.8bp tighter, but 40-yr to 60-yr 1bp wider