Gilts rallied strongly at the start....>

GILT SUMMARY: Gilts rallied strongly at the start of NY session and that is were

they have stayed until ahead of London close. Yield curve is marginally flatter

as long-end outperforms.

- 2-yr Gilt yield is -1.7bp at 0.194%, 5-yr -2.2bp at 0.468%, 10-yr -3.1bp at

1.053% and 30-yr -2.8bp at 1.714% according to Tradeweb.

- Gilts opened little changed but dipped lower, weighed by payer in 7Y and 9Y

swaps, each above Stg130mln and as markets priced in concession ahead of 5-yr

gilt re-opening auction. Upbeat Eurozone PMIs also weighed on sentiment.

- Demand at 5-yr Gilt supply coming in above average of last 6 auctions and tail

falling below avg then supported recovery in Gilts ahead of NY open.

- Gilts then rallied steadily higher, supported by move higher in USTs with

large volume of USD swaps seen going through. Some highlighted concerns over

President Trumps comments at Phoenix rally last night. Reports of a Stg85mln

receiver in 6Y swaps also aided bid in Gilts.

- Gilt Sep/Dec future rolls picked up pace today with over 140k either seen

crossing screens or blocked between 1.00/1.01.