Gilts have pared sharp opening moves...>

GILT SUMMARY: Gilts have pared sharp opening moves lower in last 30 mins or so

as there is a renewed bout of selling in Italian BTPS, although there is little

new seen to trigger the move. The 5-yr to 10-yr part of the yield curve has been

under the most pressure Thursday, therefore pivoting the yield curve slightly.

- 2-yr Gilt yield is +0.1bp at 0.823%, 5-yr +1.3bp at 1.194%, 10-yr +1.5bp at

1.519%, 30-yr +0.6bp at 1.910% and 50-yr +0.1bp at 1.686% according to Tradeweb.

- June Gilt future opened sharply lower weighed by news that the UK government

is prepared to remain in the EU customs union "beyond 2021" in order to try and

resolve the Irish border issue. The Telegraph reported that the Brexit cabinet

agreed to a new "backstop" as a last resort to avoid a hard Irish border.

- However it is far from clear if Brussels would agree to such an arrangement as

the UK looks to be able to agree trade deals during this time.

- Elsewhere Short Sterling strip has also pared losses with green and blues now

1 to 2 ticks lower vs 3 to 4 earlier. While Breakevens are relatively steady

despite rise in Brent crude oil to $80.