Gilts trading mixed ahead of NY open...>

GILT SUMMARY: Gilts trading mixed ahead of NY open weighed by comments from BoE

Tenreyro and earlier slightly higher than expected public sector borrowing, but

underpinned by Brexit concerns. The 10-yr area is seen leading the rest of the

yield curve higher.

- 2-yr Gilt yield is +0.2bp at 0.731%, 5-yr +0.2bp at 0.965%, 10-yr +0.5bp at

1.19%, 30-yr -0.1bp at 1.659% & 50-yr -0.4bp at 1.524% according to Tradeweb.

- Sep Gilt future opened higher but quickly reversed gains as initial risk-off

sentiment faded.

- Although public sector borrowing fell sharply in the first 3 months of the

2018/19 fiscal year compared to 2017/18, the monthly amount was slightly higher

than consensus forecasts which overall weighed on Gilts.

- Comments from BoE Tenreyro in an Evening Standard interview pointed towards

the possibility that she may vote for a rate hike in August as she thought the

soft Q1 data was weather related. Added that she voted for unchanged rates in

May & June because she wanted to wait & see more data on the economy. 

Sstg futures are 1 to 2 ticks lower led by fall in blue contracts