Gilts have recovered from earlier......>

GILT SUMMARY: Gilts have recovered from earlier mild risk-on losses and are

trading modestly higher, but are lagging moves in both German Bunds and US Tsy

as attention turns to BoE monetary policy decision. Curve is a touch flatter as

short-end remains anchored. 

- 2-yr Gilt yield is +0.3bp at 0.702%, 5-yr +0.1bp at 1.021%, 10-yr +0.6bp at

1.286%, 30-yr +1.0bp at 1.763% & 50-yr +1.9bp at 1.589% according to Tradeweb.

- BBC reported that PM May welcomed the passing of the Brexit bill as "a crucial

step" in delivering a "smooth and orderly Brexit" and that more details on

future relationship between the UK and EU will be released soon.

- UK public sector borrowing for May came in below expectations at Stg5bln,

around Stg2bln less than in May 2017, while total borrowing for 2017/18 was

revised Stg1bln lower to Stg39.5bln. Higher than expected receipts from VAT and

income tax was seen helping UK finance.

- Short sterling strip is steady to 2 ticks higher, curve slightly flatter as

green contracts outperform. 10-yr and 30-yr breakevens are 0.5bp tighter as

crude oil slips while swaps spreads are circa 1bp wider.