Gilts look set to close steady to......>

GILT SUMMARY: Gilts look set to close steady to higher with the yield curve

pivoting around the 10-yr sector as short and ultra long-end outperform despite

hawkish comments from BoE Haldane. 2s/10s is 1.6bp steeper & 10s/30s 0.8bp

flatter.

- 2-yr Gilt yield is -1.2bp at 0.695%, 5-yr -0.9bp at 0.993%, 10-yr unch at

1.247%, 30-yr -0.9bp at 1.713% & 50-yr -1.0bp at 1.552% according to Tradeweb.

- Bank of England agents summary report tried to paint a rosy picture on UK

conditions, however, there was some underlying weakness which could weigh on the

economy. BOE said that retail sales were firmer due to better weather, but that

consumer service growth was softer and there were signs of shrinkage in retail

sector employment. BoE also highlighted that construction still had not made up

for lost activity in Q1.

- Squeeze higher in Sep Gilts was brought to an abrupt end following Haldane

comments that UK pay pressures are gradually mounting and a hike now avoids a

more rapid move later. However the short-end of the curve saw little impact.

- Front end of the Sstg strip is 0.5 to 3 ticks higher, blues steady.