Gilts have squeezed higher with the....>

GILT SUMMARY: Gilts have squeezed higher with the yield curve seen shifting

lower by around 1bp, supported by concerns over waning credit conditions in the

UK, albeit in light volumes.

- 2-yr Gilt yield is -0.8bp at 0.75%, 5-yr -1.0bp at 1.042%, 10-yr -1.2bp at

1.288%, 30-yr -0.9bp at 1.727% & 50-yr -1.5bp at 1.569% according to Tradeweb.

- Gilts opened little changed with little data or comments seen to direct

markets with eye on key events later in the day. Gilt edged higher though

supported by mild buying flows and then hit fresh highs following BoE credit

conditions survey.

- The survey pointed to a rise in default rates for unsecured lending in Q2 and

a drop in available credit for both secured and unsecured lending, possibly

showing a slowdown in consumer confidence and spending.

- Looking ahead the UK government is expected to release the long awaited Brexit

white paper that provides details on how the government plans to leave Brexit

and on its future relationship with the EU.

- Sstg futures are steady to 2 ticks higher led by move in green contracts.