Gilts had a rather subdued reaction....>

GILT SUMMARY: Gilts had a rather subdued reaction to US Sep employment report,

more than likely underpinned by continued UK political concerns, and look set to

close mixed with the yield curve steeper as the short-end outperforms. 10-yr

Gilt has outperformed 10-yr USTs and Bund by 3.5bp and 3.2bp respectively.

- 2-yr Gilt yield is -2.5bp at 0.437%, 5-yr -1.2bp at 0.782%, 10-yr -0.3bp at

1.382% and 30-yr +0.2bp at 1.968% according to Tradeweb.

- Gilts opened steady, but spiked lower on back of higher than expected rise in

house prices and sharp sell-off in German Bunds, but recovered lost ground,

likely on the back of unit labour coasts falling, and confirmation of 30 rebel

MPS calling for Pm May to resign. 

- Gilts fell sharply back towards session lows in reaction to US AWE jumping

0.5% m/m and surprise fall in unemployment rate to 4.2% from 4.4%, but the move

was less than that seen in USTs and Bunds and Gilts eventually recovered losses

once more on continued speculation over PM May's leadership.

- Breakeven rates have widened by over 2bp today, while swap spreads are little

changed.