Gilts have reversed opening lower......>

GILT SUMMARY: Gilts have reversed opening lower move and the yield curve has

gone from bear flattening to now be bull flattening, supported by solid launch

of a new 10-yr Gilt and newswire headlines that France is looking at taking

measures against Russia in support of the UK.

- 2-yr Gilt yield is +0.3bp at 0.803%, 5-yr +0.2bp at 1.123%, 10-yr -0.1bp at

1.428%, 30-yr -1.2bp at 1.805% & 50-yr -1.7bp at 1.592%, according to Tradeweb.

- Gilts opened lower, seen weighed by overnight news that looked to increase the

changes of the UK & EU reaching a Brexit transitional agreement next week. UK's

Davis said that a shorter time frame on transitional deal was possible and the

EU was reported to have agreed to let UK sign trade deals during same the

period.

- Gilts suddenly spiked higher, reversing losses, supported by solid auction of

a new 10-yr Gilt that saw a 0.2bp tail and cover of 2.62 times and newswire

headline that said France looking to announce measures against Russia in a show

of support for the UK.

- Breakevens are steady to 0.5bpo tighter, while 2-yr swap spread drops sharply.