Gilts looks set to close steady to.....>

GILT SUMMARY: Gilts looks set to close steady to higher but with prices little

changed from Friday's close as the long-end fades earlier move higher in last

2-hours of trading and the short-end recovers some of its lost ground in a

rather subdued session.

- 2-yr Gilt yield is -0.1bp at 0.447%, 5-yr -0.5bp at 0.708%, 10-yr -0.8bp at

1.256% and 30-yr -1bp at 1.850% according to Tradeweb.

- Gilts started of modestly higher supported by risk-off flows and continuing

concerns over a post Brexit UK economy. Gilts faded though, led by sell-off in

the short-end with traders citing Sunday Times article that said the "EU

negotiators have started drawing up outlines of a future trade deal" with UK as

PM May signals it is willing to pay Stg53bln Brexit bill.

- Gilts then swung sharply in a 10 tick range, likely following 2 large Gilt

future blocks that saw 4,031 contracts bought at 125.28 and then 3,722 contracts

sold at 125.17, before squeezing higher once more. This only brought in sellers

and Gilts faded gains into London close.

- Swap spreads are little changed and 10-yr & 30-yr breakevens -1.1bp & +1.2bp.