Gilts have squeezed higher Thursday....>

GILT SUMMARY: Gilts have squeezed higher Thursday with the exception of the 2-yr

sector which is modestly wider, in-turn flattening the yield curve, taking cue

from higher move in German Bunds and US Treasuries. While Sterling briefly

dropped below $1.39 level.

- 2-yr Gilt yield is +0.7bp at 0.895%, 5-yr -0.6bp at 1.234%, 10-yr -2.3bp at

1.518%, 30-yr -2.1bp at 1.904% and 50-yr -2.2bp at 1.698% according to Tradeweb.

- Latest data from XpertHR shows pay awards remained steady at 4-yr high at

2.5%. The signs suggest these new higher rates of pay are solidifying. While UK

March mortgage approvals dip to 3-month low as the housing market cools further.

- CBI Distributive Trades Survey showed retail sales growth fell in the year to

April with sales volumes declining for the second month in a row. A pick-up is

expected in May however.

- Breakevens are circa 0.5bp tighter, while swap spreads are mixed with the

ultra long-end 1.2bp wider.