Gilts have also extended their.........>

GILT SUMMARY: Gilts have also extended their recovery in the afternoon,

supported by move higher in German Bunds, but large offer ratio at last BoE

repurchase operation put a halt to the recovery. Yield curve is now bull

steepening as short-end outperforms following disappointing weekly earnings

data.

- 2-yr Gilt yield is -3.7bp at 0.887%, 5-yr -2.7bp at 1.18%, 10-yr -2.5bp at

1.44%, 30-yr -1.4bp at 1.823% and 50-yr -0.8bp at 1.637% according to Tradeweb.

- June Gilt future hit session low in wake of 1k block as market positioned for

increase in UK wages. The market was left disappointed though as wage growth

remained steady at 2.8%, which was just enough to leave real wages in positive

territory for nearly a year. This helped support bid in the short end of the

curve as markets pared back expectations of higher BoE rates.

- 5-yr breakevens are 1bp tighter while 10s and 30s are little changed. Swap

spreads are mixed but steady.

- Tomorrow sees release of UK inflation and producer price index for March.