Gilts have slipped lower in London.....>

GILT SUMMARY: Gilts have slipped lower in London afternoon session as soft US

Treasuries and upcoming 20-yr Gilt supply weigh. Curve is marginally steeper

with the long-end seen underperforming.

- 2-yr and 5-yr Gilt yields are circa 6bp wider at 0.543% and 0.804%

respectively, 10-yr 1.1bp higher at 1.293% and 30-yr 1.0bp higher at 1.828%.

- Gilt prices opened lower in wake of late Asian sell-off in USTs, however

gradually recovered on Brexit related concerns and despite positive UK IP data.

Bloomberg newswire headline that China is thinking of slowing down or even

stopping purchases of USTs weighed heavily on Gilts, although staged a decent

recovery, before more selling was seen in the afternoon.

- Brexit concerns are starting to come to the surface again with the latest

being Germany insisting the UK should pay if it wants its banks to be able to

access EU financial markets after Brexit.

- Breakevens are mixed with 5-yr and 30-yr little changed, but 10-yr 1.3bp wider

at 3.119%. While swap spreads are wider across the board led by 2.2bp move

higher in the 2-yr.