Gilts looking to close modestly........>

GILT SUMMARY: Gilts looking to close modestly higher with the yield curve bull

flattening, supported by flight-to-quality bid in wake of latest terrorist

attack, US political concerns and afternoon bid in US Treasuries.

- 2-yr Gilt yield is -1bp at 0.220%, 5-yr -1.1bp at 0.494%, 10-yr -1.8bp at

1.076% and 30-yr -1.4bp at 1.745% according to Tradeweb.

- Gilts opened Friday modestly higher, as markets traded with a mild risk-off

tone following terrorist attack in Barcelona, continued concerns over the

ability of the Trump administration and further dovish comments from Fed

officials.

- Some profit taking then saw prices pare gains, however rallied higher, taking

cue from large 2-yr/5-yr curve flattener trade in German futures. Before more

profit taking ahead of NY open saw prices dip back towards lows.

- Some block selling at start of NY trade saw Gilt future hit fresh session low,

however rally in USTs/weak equities saw Gilts recover back up towards highs.

Then further selling saw future price trade in mid-range.

- Swap spreads are little changed while 10-yr & 30-yr breakevens are 1bp tighter