Gilts set to end Tuesday lower, with...>

GILT SUMMARY: Gilts set to end Tuesday lower, with the exception of the

short-end which is modestly higher. Yield curve is steeper in mild risk-on tone

to markets, which have one eye on Jackson Hole later this week.

- 2-yr Gilt yield is -0.9bp at 0.211%, 5-yr +0.1bp at 0.487%, 10-yr +2.0bp at

1.084% and 30-yr +1.7bp at 1.741% according to Tradeweb

- Gilts opened modestly lower with the long-end seen taking the brunt of the

selling and therefore steepening the yield curve, as market traded with a mild

risk-on tone, with equites squeezing higher.

- However Gilts spent the rest of the morning session recovering those losses,

supported by large receiver in 15Y swaps and surprise Stg0.2bln surplus in UK

borrowing for July.

- Gilts faded lower though at start of US session, weighed by move lower in US

Treasuries and then hit session low following large payer in 5Y swaps.

- This seamed to be the cue for a turn around once again and Gilts bounced off

lows aided by soft US house price data.

- Swap spreads are mixed with 2s and 5s wider, 10-yr breakevens are -1bp