Gilts have been under pressure from the.......>

GILTS: Gilts have been under pressure from the get-go Wednesday, seen weighed by

overnight comments from the UK's National Institute of Economic and Social

Research (NIESR). However, prices have pared losses on the back of mild profit

taking, helped by weaker than expected construction PMI.

- 2-yr Gilt yield is +1.6bp at 0.275%, 5-yr +1.9bp at 0.598%, 10-yr +2.3bp at

1.231% and 30-yr +1.5bp at 1.848% according to Tradeweb.

- Gilts opened much weaker as NISER called for the Bank of England to raise

rates in the first quarter of 2018 and to open up a debate on policy

normalisation, while expecting growth to pick up in the second half of 2017. 

- Gilts faded the lower move as future hit 1st resistance at 124.74 (21-DMA) and

in wake of weak July construction PMI (51.9 vs consensus of 54.0). This only

produced more sellers though and Gilt future eventually hit fresh session low.

- This seemed to flush out the last of the sellers and buyers gradually returned

to the markets and pushed Gilts back up towards session highs.

- Swap spreads are mixed with short-end tighter, while the long-end is wider.

While Breakevens are little changed despite firmness in sterling.