Gilts remain in negative territory.....>

GILT SUMMARY: Gilts remain in negative territory weighed by US 10-yr Tsy note

trading clearly above 3.00% level, but remain underpinned by sell-off in

European equities. 5-yr part of the yield curve is the worst performer on the

day so far leading to 5s/30s flattening by 2.2bps.

- 2-yr Gilt yield is +1.5bp at 0.89%, 5-yr +2.9bp at 1.248%, 10-yr +2.2bp at

1.562%, 30-yr +0.7bp at 1.948% and 50-yr +0.3bp at 1.747% according to Tradeweb.

- There has been a dearth of UK data today and comments from Brexit Secretary

David Davis, whilst appearing at a Select committee gave very little away on

current UK/EU negotiations apart from that a free trade agreement was

"overwhelmingly probable". 

- Nomura put out a research note this morning recommending a 10s/20s flattener

as the UK curve has entered into a "new-old dynamic of bear flattening and bull

steepening" and expect a sharp rise in yields as BOE raises rates.

- Breakevens have edged higher led by the 1.4bp move in 30-yr sector, while swap

spreads are mixed with 2-yr 2.4bp tighter but 15-yr and 30-yr circa 2.5bp wider.