Gilts saw sharp 2-way flow in wake.....>

GILT SUMMARY: Gilts saw sharp 2-way flow in wake of US jobs report and net

change was small as a very strong payroll number was offset by weak earnings

data. Overall Gilts look set to close lower though with the ultra long-end

seeing the largest downside move.

- 2-yr Gilt yield is +3.3bp at 0.838%, 5-yr +2.3bp at 1.176%, 10-yr +2.8bp at

1.502%, 30-yr +3.9bp at 1.925% and 50-yr +4.4bp at 1.712%.

- Gilts opened lower weighed by overnight news of Trump signing off tariffs on

steel and aluminium and announcement that he has agreed to meet North Korean

President Kim Jung Un sometime in May

- Gilts then bided their time ahead of US jobs report, trading in tight 10 tick

range unfazed by rebound in industrial production and smaller trade balance

deficit that will weigh less on Q4 GDP.

- Markets were then unsure which way to turn following a +313k non-farm payroll

number but fall in average weekly earnings to 2.6% from 2.8% and steady

unemployment rate. 

- Breakevens are 0.6-2bp wider led by 5-yr and swap spreads are little changed