Gilts look set to close lower and at...>

GILT SUMMARY: Gilts look set to close lower and at or near session lows weighed

by early morning sell-off as markets looks to reduced structural long positions

ahead of key BoJ, Fed and BoE monetary policy meetings this week. The 10-yr and

above sector has come under the most selling pressure and in-turn steepening the

yield curve.

- 2-yr Gilt yield is +3bp at 0.796%, 5-yr +5.4bp at 1.082%, 10-yr +7.2bp at

1.358%, 30-yr +6.bp at 1.804% & 50-yr +6.3bp at 1.652% according to Tradeweb.

- Gilts sold off after very short opening move higher, weighed by concerns of

tweaks to BoJ monetary policy on Tuesday and then BoE super Thursday where a

25bp rate hike is nearly fully priced in by markets. A 6,335 G U8 block at

123.18 which appeared to be a sale also weighed heavily on market sentiment.

- Selling resumed after a short pause as NY traders got to their desks, with

little buying interest seen to stem the flow. MNI FI Position Indicator suggests

markets are still structurally long the Gilt future and could be reducing this

ahead of central bank meetings.

- Decent selling seen in sstg futures with Blue contracts lower 5-7 ticks