Gilts have settled down after a........>

GILT SUMMARY: Gilts have settled down after a volatile opening hour as markets

reacted to Carney comments and are trading steady to modestly higher with the

short-end leading the way and in-turn bull steepening the yield curve.

- 10-yr yield is -0.9bp at 1.499%, with 2s10s & 10s/30s 1.7bp & 1.4bp steeper

respectively 

- It was Carney carnage at the Gilt open with the June future opening 55 ticks

higher in knee-jerk reaction to BoE Governor Mark Carney comments over night

which appeared to suggest that May rate hike was not necessarily a done deal and

that it could come at other meetings this year. G M8 last +11 ticks

- MNI PINCH saw chance of a rate hike for May fall sharply to around 50%

compared to 81.5% seen at yesterday's close with markets now seeing the most

likely time for next rate hike at August BoE MPC meeting.

- Short sterling strip has seen significant moves and volume. Strip quickly

opened 6 to 9 ticks higher, but has since given up around half those gains as I

type. Stand out trade has been short covering in May8 mid-curve 99.00/99.125

call spreads at 1 with 77k being blocked.