Gilts pared some of its earlier........>

GILT SUMMARY: Gilts pared some of its earlier gains in the afternoon in wake of

very strong rise in Canadian employment and reports coming out of the US that

the tax bill is more than likely to get passed by the Senate.

- 2-yr Gilt yield is -3.5bp at 0.486%, 5-yr -4.0bp at 0.768%, 10-yr -4.4bp at

1.285% and 30-yr -3.0bp at 1.846% according to Tradeweb.

- Gilts rallied in the morning led by the 10-yr part of the yield curve as there

is fresh doubt on there being some form of agreement on the Northern

Ireland/Ireland border issue before PM May and EU Juncker meeting on Monday.

Even stronger than expected UK manufacturing PMI did not dent rally in Gilts.

- UK manufacturing PMI for Nov increased to 58.2, highest level in 4-yrs from an

upwardly revised 56.6 in Oct, beating consensus of a small rise to 56.5.

- Gilt future hit intra-day high just before Canadian jobs data, but then sank

30 ticks after the release. While tax bill gaining votes also weighed. 

- UK Breakevens have continued their tightening move with 5-yr 0.7bp tighter and

10-yr 1bp tighter. Short-end swaps spreads are wider by around 1.5bps while

30-yr is 1bp tighter.