Gilts faded into the 20-yr Gilt........>

GILT SUMMARY: Gilts faded into the 20-yr Gilt supply, but recovered some of the

lost ground following strong demand and small tail, to trade steady to modestly

higher led by the long-end, and in turn flattening the yield curve.

- 2-yr Gilt yield is +0.1bp at 0.536%, 5-yr -0.6bp at 0.79%, 10-yr -1.9bp at

1.267% and 30-yr -2bp at 1.80%.

- The DMO tapped 1.75% Jul 2037 Gilt for Stg2.25bln with demand rising and tail

dropping to just 0.1bp vs 0.4bp previously.

- Gilts opened higher led by the long-end taking cue from overnight move higher

in USTs following comments from China's SAFE that BBG story on China slowing or

even stopping purchases of USTs could of been from a 'wrong source' or even fake

news.

- A survey from recruiter Morgan McKinley showed vacancies in London's financial

district in Dec dropping by 52% m/m the highest in 3-years, showing possible

sign of impact of Brexit, as banks hold back on recruiting.

- Both swap spreads and breakevens are little changed so far Thursday, while

short sterling strip is steady to higher but in very light volume.