Gilts look to close higher but off.....>

GILT SUMMARY: Gilts look to close higher but off session best levels, as they

take cue from movement in German Bunds following ECB press conference. The 2-yr

part of the yield curve is an exception though and has remained in negative

territory throughout the day and in-turn flattens the yield curve.

- 2-yr Gilt yield is +0.6bp at 0.894%, 5-yr -0.8bp at 1.232%, 10-yr -2.6bp at

1.515%, 30-yr -2.8bp at 1.896% and 50-yr -3.2bp at 1.688% according to Tradeweb.

- There was only second tier data from the UK today, but what there was, only

supported the current run of disappointing data. UK March mortgage approvals

dipped to a 3-month low as the housing market cools further. While the CBI

Distributive Trades Survey showed retail sales growth fell in the year to April

with sales volumes declining for the second month in a row. A pick-up is

expected in May however.

- Breakevens are circa 1bp tighter, while swap spreads are mixed with the ultra

long-end 1.5bp wider.

- Tomorrow sees release of 1st estimate of Q1 GDP for the UK and comments from

BoE Governor Carney.