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

GILT SUMMARY: Gilts are trading steady to higher into Tuesday's close with the

yield curve flatter as ultra ling-end holds onto earlier gains, while short to

middle part of the curve reverse or pare gains in wake of Gilt remit

announcement for fiscal year 2018/19.

- 2-yr Gilt yield is -0.1bp at 0.836%, 5-yr -0.7bp at 1.167%, 10-yr -1.3bp at

1.488%, 30-yr -3.9bp at 1.888% & 50-yr -3.6bp at 1.683%, according to tradeweb.

- June Gilt future was steady going into the afternoon session, but then spiked

to session high as Chancellor Philip Hammond released updated OBR growth (mixed)

and borrowing forecasts (slightly lower), steady US CPI and in reaction to

newswire headlines that US President Trump had sacked Sec State Tillerson.

- The short to mid part of yield curve then pared gains, while longs held firm

as Trump named CIA's Pompeo as replacement and DMO announced gilt issuance for

FY 2018/19 that showed a larger nominal reduction in the ultra-long-end of the

curve. Although the unallocated portion was raised to Stg6.6bln.

- 5-yr and 10-yr breakevens are 1.8bp & 2.7bp tighter, while 30-yr is little

changed. While Swap spreads are steady to 1.5bp wider.