Gilts look set to close Tuesday........>

GILT SUMMARY: Gilts look set to close Tuesday higher led by the rally in the

10-yr sector as European and US stocks par gains. A disappointing BoE APF

repurchase operation limited the upside in Gilts though.

- 2-yr Gilt yield is -0.3bp at 0.891%, 5-yr -0.9bp at 1.193%, 10-yr -2bp at

1.426%, 30-yr -0.2bp at 1.749% and 50-yr +0.9bp at 1.537% according to Tradeweb.

- Gilts went up a little and then down a bit in the morning session to leave

them little changed at start of US session. However, markets then turned to

stock watching, moving higher or lower depending on the swing in equities.

- Gilts rallied to fresh highs as US stock futures pared gains and supported by

BoE APF re-investment operation in the over 15-yr sector. Gilts pared gains

though as US Emini future turned around sharply and offer ratio rose to 3.81

from 3.57 at BoE APF re-investment op. However Gilts rebounded once more on BBG

headline that US is looking to impose emergency law to reduce China takeovers.

- The DMO successfully sold GBP600mln of the IL Gilt 0.125% 2056 with a

respectable cover of 2.03x. Given the recent decline in long dated breakevens,

demand had been expected to be firm.