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Gilts have reversed earlier gains......>

GILT SUMMARY
GILT SUMMARY: Gilts have reversed earlier gains and look set to close mixed,
yield curve mildly flatter as ultra long-end outperforms, following IL Gilt
supply, Reuters ECB sources story and higher than expected US PPI data.
- 2-yr Gilt yield is -0.1bp at 0.754%, 5-yr -0.8bp at 1.048%, 10-yr -0.4bp at
1.296%, 30-yr -0.4bp at 1.732% & 50-yr -1.1bp at 1.579% according to Tradeweb.
- Gilts opened higher underpinned by rise in US/China trade tension, but move
seen limited due to Aug-41 IL gilt syndication & comments from German Chancellor
Merkel on Brexit.
- Gilts sold off when the Strg3.25bln Aug-41 Il Gilt got priced and then further
selling was seen in reaction to Reuters ECB sources story that said members had
different views on when to hike rates. Strong US PPI data weighed as well.
- Gilts bounced off lows though as newswire said that Tory Brexiteers have
tabled 4 amendments to the Trade Bill in an effort to disrupt govt plans.
- Sstg strip has pared gains but remains steady to 2 ticks higher, curve little
changed. 30-yr breakevens are 1.6bp wider. Tomorrow could see release of Brexit
white paper and Trump comes to UK for 3-day visit.

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