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Gilts look set to close modestly lower........>

GILTS
GILTS: Gilts look set to close modestly lower having reversed earlier gains as
market contagion from sharp fall in Turkish Lira is looking contained. Yield
curve has shifted higher by circa 2bps having pivoted around 10-yr sector
earlier.
- 2-yr Gilt yield is +1.8bp at 0.722%, 5-yr +1.9bp at 1.01%, 10-yr +2.1bp at
1.268%, 30-yr +1.9bp at 1.736% & 50-yr +1.9bp at 1.589% according to Tradeweb.
- An unsubstantiated tweet that Turkey will release US Pastor Brunson in a few
days was the catalyst for sell-off in Gilts and continued to edge lower despite
a denial of the rumour, as move lower in yields looked over done.
- Market could also be positioning ahead of UK labour data (unemployment rate
and average weekly earnings) released tomorrow.
- Earlier, Gilts opened higher and hit intra-day high on renewed Turkish Lira
concerns, however faded the move as overall contagion to over markets appeared
limited and European stocks bounced off session lows.
- Short sterling futures have also reversed earlier move higher and are now
steady to 2 ticks lower with strip touch steeper as blue contracts underperform.

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