Gilts have extended gains in London....>

GILT SUMMARY: Gilts have extended gains in London afternoon trade supported by

risk-off sentiment following continued fall in European equities, sharp fall in

the Nasdaq and drop in the commodity prices. The 10-yr sector has led the move

higher therefore pivoting the yield curve.

- 2-yr Gilt yield is -3.6bp at 0.681%, 5-yr -4.2bp at 0.967%, 10-yr -5.1bp at

1.215%, 30-yr -4.0bp at 1.693% & 50-yr -3.5bp at 1.545% according to Tradeweb

- It was a rather slow steady start to Wednesday trade with UK inflation data

for July pretty much coming in-line with expectations and avoided any upside

surprises.

- The main thrust of the move higher came towards cross over to NY session and

then in London afternoon trade, as European stocks reversed earlier gains in

wake of disappointing revenue numbers from China's Tencent. Further equity

sell-off and fall in soft and hard commodity prices then underpinned further bid

in Gilts.

- Short sterling futures are 0.5 to 5 ticks higher, strip flatter as green/blue

contracts outperform whites. While breakevens are 2.5 to 3bp tighter