Gilts edged higher in London...........>

GILT SUMMARY: Gilts edged higher in London afternoon trade, underpinned by

earlier soft CPI data and continued domestic political uncertainty. Weak US data

also supported bid in Gilts. 5-yr to 10-yr sector seen leading the move higher.

- 2-yr Gilt yield is -2.0bp at 0.732%, 5-yr -4.5bp at 0.979%, 10-yr -4.5bp at

1.216%, 30-yr -3.2bp at 1.688% & 50-yr -2.2bp at 1.559% according to Tradeweb.

- The main driver in the move higher in Gilts came in reaction to the lower than

expected June inflation figure (headline at 2.4% y/y & core at 1.9% y/y vs

consensus of 2.6% y/y & 2.1% y/y respectively), as fall in cost of clothing &

footwear/computer games was seen offsetting rise in fuel prices.

- Gilts edged higher as newswires reported that former foreign secretary Boris

Johnson would make a resignation statement in the House of Commons and following

a couple of Gilt future blocks.

- Disappointing US housing starts and building permits then push Sep Gilt future

to intra-day high of 123.99, before fading to trade at 123.76 currently

- Sstg strip has bull flattened as greens and blue contracts rise by 5-6 ticks,

however chance of a rate hike in August is at 78% according to MNI PINCH.