Gilts experienced a roller-coaster.....>

GILT SUMMARY: Gilts experienced a roller-coaster ride in the afternoon, spiking

lower as 10-yr Tsy note approached and then inched above the 3% level, only to

bounce back quickly as US Richmond Fed index dropped into negative territory.

Gilts remain slightly lower though with yield curve bear flattening.

- 2-yr Gilt yield is +2.5bp at 0.876%, 5-yr +3.3bp at 1.221%, 10-yr +1.9bps at

1.542%, 30-yr +1.1bp at 1.941% and 50-yr +0.9bp at 1.744% according to Tradeweb.

- June Gilt future opened modestly higher taking cue from higher move in US Tsys

and German Bunds but reversed gains as DMO announced surprise Stg3.1bln rise in

planned Gilt issuance. The 2-yr to 7-yr sector came under the most pressure as

Stg1.4bln of the planned increase will hit that part of the curve.

- Sharp fall in the business optimism of the CBI trends survey then saw Gilts

bounce off session lows but remained in lower bound range, before events is the

US took over.

- DMO sold Stg750mln 2048 IL Gilt which had little impact on breakevens, which

are little changed on the day. Swap spreads are marginally wider.