Gilts recovered losses during London...>

GILT SUMMARY: Gilts recovered losses during London afternoon trade but with

little seen to trigger the move, have slipped lower in the last hour or so

weighed by risk-on tone in markets. Yield curve is ever so slightly steeper as

short-end lags move higher in yields.

- 2-yr Gilt yield is +0.8bp at 0.697%, 5-yr +1.1bp at 0.983%, 10-yr +1.4bp at

1.237%, 30-yr +1.2bp at 1.713% & 50-yr +1.2bp at 1.564% according to Tradeweb

- A rather strange afternoon of trade saw Sep Gilt drop to intra-day low of

123.55 after set of strong numbers from US retailer Walmart, but then staged a

recovery over next couple of hours, underpinned by soft US housing starts and

Phil Fed numbers. The future topped out at 123.85 despite rally in Sterling,

before dropping back to now trade at 123.68, 15 ticks lower on day, as risk-on

sentiment took hold once more.

- Earlier there was little reaction to strong UK retail sales as temporary

factors (warm weather and world cup) were seen influencing higher sales.

- Short sterling futures are steady to 2 ticks lower, strip touch steeper as

green/blue contracts underperform whites.