Gilts are trading steady to higher,....>

GILT SUMMARY: Gilts are trading steady to higher, with the yield curve bull

flattening as the long-end outperforms likely on some month-end rebalancing and

extension flows. While the short-end remains anchored by higher than expected

Eurozone headline inflation data and hawkish slant to BoE carney's comments

yesterday.

- 2-yr Gilt yield is -0.3bp at 0.605%, 5-yr -0.5bp at 0.966%, 10-yr -0.9bp at

1.451%, 30-yr -1.2bp at 1.89% and 50-yr -1.1bp at 1.681%. 

- Gilts opened higher with the yield curve shifting lower, supported by

overnight recovery in US Treasuries and strong opening in German Bunds. the

short-end faded gains though, weighed by hawkish take on BoE carney comments

(focus on more conventional monetary policy) and bounce in UK GfK consumer

confidence.

- The higher than expected Eurozone flash CPI data then weighed on the short-end

to belly of the yield curve most, while the long-end remained underpinned.

- Breakevens are little changed expect 5-yr which is 1.5bp wider at 2.94%, while

swap spreads are slightly tighter expect for the 1.2bp widening in 2-yr.