Gilts hit session low in reaction to...>

GILT SUMMARY: Gilts hit session low in reaction to hawkisly interpreted ECB

monetary policy decision, however, recovered lost ground and eventually hit

session highs, taking cue from short-cover rally in German Bunds following

dovish talk from Draghi. Yield curve looks to close modestly flatter

- 2-yr Gilt yield is -0.2bp at 0.806%, 5-yr -0.7bp at 1.153%, 10-yr -2.2bp at

1.472%, 30-yr -1.3bp at 1.887% and 50-yr -1.2bp at 1.667%.

- Gilts opened little changed, by then slipped lower on light consistent

selling, weighed by overnight news that US administrations was prepare to offer

Mexico, Canada and some other countries an exemption of steel and aluminium

tariffs.

- The ECB removed easing bias on its APP programme but Draghi sounded dovish in

the press conference backed up by a steady to touch lower update to inflation

forecasts and that QE could still be extended/tapered after Sept if needed.

While US President is holding meetings on trade tariffs, but it is unclear if he

will be signing them into law. 

- Breakevens reversed widening move and are touch tighter & swap spreads mixed.