Gilts look set to close higher, near...>

GILT SUMMARY: Gilts look set to close higher, near top end of intra-day range

underpinned by global growth concerns and divisions within Europe. 10-yr part of

the yield curve is leading the rest of the curve higher.

- 2-yr Gilt yield is -2.7bp at 0.717%, 5-yr -3.5bp at 1.014%, 10-yr -4.5bp at

1.258%, 30-yr -3.9bp at 1.732% and 50-yr -3.5bp at 1.571%.

- Gilts opened little changed but quickly rose on back of Bund rally as division

within Europe on immigration and reform became more open/vocal and concerns

China growth is slowing, which was back up by comments from BoE financial

stability report. A rare profits waring from Jon Lewis added to domestic risks.

- Comments from Ireland's Coveney that draft conclusions on Brexit were 'very

strong' temporary weighed on Gilts, however gilts recovered as NY session got

underway. Some big swings in Gilt future was then seen on newswire headlines on

Trump deciding against harsh measures on China and mixed durable goods data.

- There was some decent buying in white and red Sstg contracts in the afternoon,

with strip shifting higher by 2 to 4 ticks. 5-yr breakevens are 1.7bp wider but

30-yr is 1.2bp tighter as oil price rises. Swap spreads are a touch wider.