Gilts trading higher into Friday's.....>

GILT SUMMARY: Gilts trading higher into Friday's close, led by the 10-year part

of the yield curve as Catalonia parliament votes for independence and on rumours

that President Trump is "leaning towards Powell" as next Fed Chair.

- 2-yr Gilt yield is -3.4bp at 0.460%,5-yr -4.5bp at 0.794%, 10-yr -5.1bp at

1.35% and 30-yr -4.1bp at 1.918% according to Tradeweb.

- Gilts rallied strongly about half-an-hour after opening on the back of rising

tension between Spain and Catalonia governments and pretty much remained close

to session highs until a slight fade was seen as NY session got underway.

- There was some additional selling in reaction to higher than expect US flash

Q3 GDP number, however move was quickly reversed as attention quickly turned to

start of Catalan parliamentary session, were a vote on declaring independence

would be held.

- The vote came in favour which led to flight-to-quality buying in Gilts, Bunds,

gold and Yen. Although Spain's Rajoy is expected to oust the Catalan Govmt

- Breakevens are between 1.7bp to 3.5bp tighter with the curve flattening, while

swap spreads are mixed with 10-yr 0.9bp wider at 4.15bps