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Gilts have reversed opening losses.....>

GILT SUMMARY
GILT SUMMARY: Gilts have reversed opening losses and are currently marginally
higher, led by the short-end of the curve, as comments from BoE MPC member
Michael Saunders are less hawkish than expected.
- 2-yr Gilt yield is -1.0bp at 0.17%, 5-yr -0.6bp at 0.438%, 10-yr -0.4bp at
1.032% and 30-yr -0.5bp at 1.701% according to Tradeweb.
- Gilts opened modestly lower weighed by modest easing in US Treasuries
overnight and tick higher in UK GfK consumer confidence. Gilts pared losses
however, as markets interpreted BoE Saunder's comments as less hawkish than
previous -- Backs modest rate rise to get to inflation goal, but risk Brexit
path is bumpy and weighs on confidence.
- Gilts eventually reversed gains and broke into positive territory as markets
digested DMO announcement of Q3 Gilt issuance which showed a lack of ultra-long
Gilt supply.
- Swap spreads are mixed with 2-yr +1.2bp & 7-yr -2bp. Breakevens are unchanged
- Attention now turns to a raft of US data, while markets also await press
briefing on 3rd round of Brexit talks.

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