Gilts have slipped lower Tuesday,......>

GILT SUMMARY: Gilts have slipped lower Tuesday, with yield curve modestly bear

flattening as short-end seen weighed by mixed UK data and domestic political

risks subside for now. But prices are off their worst levels.

- 2-yr Gilt yield is +2.2bp at 0.750%, 5-yr +1.9bp at 1.049%, 10-yr +1.7bp at

1.293%, 30-yr +1bp at 1.723% & 50-yr +0.6bp at 1.579 according to Tradeweb.

- Despite the couple of senior cabinet resignation yesterday it appears PM May

is safe in her job for now as it not sure Brexiteers within her own party have

enough MPs to trigger a leadership challenge. While Jacob Rees-Mogg told

reporters they did not expect a confidence motion to be brought after May met

the parliamentary party in a bid to get their support for her plan.

- Sep Gilts bounced off session lows after a raft of UK data came in mixed. GDP

was pretty much in line with expectations, while construction output, trade

balance and index of service were a touch better than expected. However,

industrial and manufacturing production surprised to the downside.

- Short sterling futures are 1 to 2 ticks lower, curve little changed, while UK

breakevens are 1bp wider but front end of swap spreads circa 2bp tighter