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Gilts look set to close Monday.........>

GILT SUMMARY: Gilts look set to close Monday modestly higher, but with little
conviction as volumes are over half the daily average due to US bond markets
being closed for Columbus Day holiday. Curve is slightly flatter as short-end
seen weighed by upward revision to UK unit labour costs.
- 2-yr Gilt yield is -0.1bp at 0.425%, 5-yr -0.9bp 0.760%, 10-yr -0.6bp 1.358%
and 30-yr -0.5bp at 1.947%, according to Tradeweb.
- Gilts opened lower with majority of pressure seen on the front-end of the
curve as the Times reported there was an error on ONS' unit labour costs and
growing confidence that PM May is likely to remain in power as the movement
behind calling for her resignation faded over the weekend. The long-end end was
seen supported by block buy in Dec Gilt future -- 1,125 at 123.81.
- Gilts then spent the rest of the day oscillating in a tight range with little
direction seen due to lack of European/UK data.
- Little movement seen in swap spreads today, however 5-yr and 10-yr breakevens
are 2.6bp and 2.0bp tighter respectively, as linkers weighed by revised ULC.

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