Gilts took another leg lower in the....>

GILT SUMMARY: Gilts took another leg lower in the afternoon following upbeat US

durable goods data, adding to the mid-morning sharp sell-off, but than

flat-lined into London close. 8-/10-yr part of the yield curve has taken the

brunt of the selling, therefore pivoting the curve.

- 2-yr Gilt yield is +4.0bp at 0.502%, 5-yr +5.7bp at 0.851%, 10-yr +6.1bp at

1.412% and 30-yr +4.1bp at 1.956% according to Tradeweb.

- Gilts opened a touch higher and were seen treading water before spiking lower

in knee-jerk reaction to surprise pick up in Q3 growth to 0.4% q/q from 0.3%

q/q. 5-yr to 10-yr Gilts took the brunt of the selling with yields rising over

5bp higher and the 5-yr reaching highest level since referendum vote last year.

- The GDP figures were seen cementing the chances of a BOE rate hike next week,

with the question now being the likely size of the vote. MNI PINCH see markets

pricing in a 88.5% chance of a 25bp rate hike on Nov 2.

- A large bearish trade was bought in short sterling options, looking for faster

rise in rates next year. Swap spreads are mixed with 2-yr -3bps and 30-yr +1bp

while breakeven curve is bear steepening with 30-yr 3bp wider.