Gilts attempted at a recovery in.......>

GILT SUMMARY: Gilts attempted at a recovery in London afternoon session but

slipped back towards intra-day lows weighed by heavy selling in German Bunds and

better than expected US existing home sales. Yield curve has steepened.

- 2-yr Gilt yield is +0.9bp at 0.848%, 5-yr +1.2bp 1.185%, 10-yr +2.7bp at

1.521%, 30-yr +3.3bp at 1.927% and 50-yr +3.5bp at 1.732% according to Tradeweb.

- Today was mainly about easing of geo-political tensions and some encouraging

news on global trade after Mnuching announced possible trade trip to China.

- This is likely to continue as first major UK economic data release is not

until Friday with first estimate of Q1 2018 GDP crossing the wires. Markets are

not seeing it will make pretty reading and expect the economy to grow by only

0.2% q/q. Latest public sector borrowing numbers are released Tuesday and the

DMO taps 30-yr Linker tomorrow as well but these are not seen as market moving.

- Markets will also be keeping close on domestic political events as pressure is

begging to build on PM May over Brexit and stance on customs union.

- Breakevens are mixed, fading earlier move higher as oil drops from recent

highs, while swaps spreads are little changed.