Gilts look set to close mixed..........>

GILT SUMMARY: Gilts look set to close mixed following 2-way flow in the

afternoon session, however flows have been light, despite release of key US

data. Yield curve is modestly flatter with the short-end being under pressure

for majority of Friday. 2s/30s yield spread is 1.9bp tighter.

- 2-yr Gilt yield is +1.4bp at 0.738%, 5-yr +1.1bp at 1.020%, 10-yr +0.1bp at

1.255%, 30-yr -0.6bp at 1.702% & 50-yr -0.2bp at 1.56% according to Tradeweb.

- There was more volatility in the afternoon as US jobs data came in mixed with

a strong non-farm payroll number offset by weaker than expected monthly AHE and

rise in unemployment rate to 4.0% from 3.8%. Future volume though was lower than

average leading to choppy markets.

- Markets eyes are now turning to crucial cabinet meeting on Brexit at Chequers

with the hope that an agreement could be found on a customs arrangement with the

EU.

- Short Sterling strip is mixed with whites steady to 1 tick lower, greens/reds

1 to 2 ticks lower and blues steady to 1 tick higher. 5-yr breakevens are 0.5bp

wider while 10-yr and 15-yr swap spreads are 1bp wider.