Gilts are trading steady to lower in...>

GILT SUMMARY: Gilts are trading steady to lower in light pre-Christmas trade

with the yield curve steepening as the long-end is weighed by overnight

steepening move in US Treasuries and as markets take profits on flattening move

seen last week. 5s/30s is 1.5bp wider at 101.9bps compared to yesterdays fresh

9-year low of 100.2bps.

- 2-yr Gilt yield is +0.6bp at 0.448%, 5-yr +1.1bp at 0.714%, 10-yr +2.0bp at

1.168% and 30-yr +2.8bp at 1.737% according to Tradeweb. 

- There has been a dearth of UK data released today so attention has been on

German IFO and movement in US Treasuries, so news that US Tax reform is likely

to get voted through on Wednesday weighed on the long-end of the curve first

thing. There was little to no impact from mixed German IFO numbers, but gilts

faded lower taking cue from sell-off in Bunds, probably led by hawkish

interpretation of ECB Hansson comments.

- Wrangling over if the UK could get a bespoke trade deal with the EU continued,

but was likely just grand standing before talks start in March.

- Swap spreads are marginally tighter led by 2-yr and breakevens a touch wider.