Gilts looks set to close Friday........>

GILT SUMMARY: Gilts looks set to close Friday mixed and near session lows as

risk-off sentiment is partially offset by high Canadian CPI. The 10-yr sector

continues to lead the rest of the yield curve lower. 2s/10s curve spread is

1.2bp flatter, while 10s/30s is 0.8bp steeper.

- 2-yr Gilt yield is +0.6bp at 0.70%, 5-yr -0.1bp at 0.978%, 10-yr -0.7bp at

1.227%, 30-yr +0.2bp at 1.712% & 50-yr +1.1bp at 1.571% according to Tradeweb.

- Stabilisation in the Turkish Lira and much higher than expected Canadian CPI

data weighed on Gilts in London afternoon trade, however soft US U.of Mich

sentiment made sure gilts did not completely pare gains. 

- In the morning session, Gilts squeezed higher supported by risk-off tone to

markets as Lira sold off sharply in IMF/rating update uncertainty. Comments from

UK Foreign Secretary Jeremy Hunt also seen underpinning bid in Gilts and

weighing on Sterling

- There was no update from Brussels on the last round of negotiations.

- Short sterling pared some of there eairler move higher but strip remains a

touch flatter as blue contracts ar 1-2 ticks higher an whites steady to +1 tick