Gilts look sent to close sharply.......>

GILT SUMMARY: Gilts look sent to close sharply lower weighed by rise in JGB

yields, 10-yr Tsy breaking above 3.0% and strong US ADP number. The 10-yr sector

continues to lead the rest of the yield curve higher with 2s/10s 3.2bp steeper

and 10s/30s 1.4bp flatter.

- 2-yr Gilt yield is +2.3bp at 0.797%, 5-yr +4.8bp at 1.109%, 10-yr +5.4bp at

1.387%, 30-yr +3.8bp at 1.812% & 50-yr +3.1bp at 1.648% according to Tradeweb.

- Gilts were lower from the get-go, weighed by fall in JGBs during Asian session

as markets tested the BoJ's new wider trading band for 10-yr JGB and as FT

reports possible fudge to get a Brexit withdrawal agreement.

- Sep Gilt future tried to recover lost ground but faded lower despite UK

manufacturing PMI coming in at a 3-month low of 54.0 as markets put on steepener

trades ahead of US data and Fed FOMC decision. Strong US ADP number then pushed

Sep Gilt future to session low of 122.08.

- Short sterling futures are lower with strip steeper as blue contracts fall 6

ticks while whites are steady to 1 tick lower, with market focusing on BOE rate

decision, release of IR report and natural interest rate estimate tomorrow