Gilts trading modestly higher but......>

GILT SUMMARY: Gilts trading modestly higher but are off intra-day highs as

markets fade latest flight-to-quality bid as Turkish Lira falls sharply on

ratings/IMF risk. The 10-yr sector is once again leading the yield curve lower

as move seen as futures lead.

- 2-yr Gilt yield is -0.7bp at 0.687%, 5-yr -1.5bp at 0.964%, 10-yr -2.3bp at

1.211%, 30-yr -1.8bp at 1.693% & 50-yr -1.3bp at 1.548% according to Tradeweb

- Sep Gilt future opened 7 ticks higher and has not really looked back,

gradually edging higher despite lack of direction seen overnight as markets got

the Brexit jitters in wake of comments from Foreign Secretary Jeremy Hunt that

"Britain would survive and prosper without a Brexit deal", which also led to

sterling reversing early gains vs Dollar and Euro.

- Sudden fall in the Lira on what appeared to be little new news, pushed yields

to session lows, however, markets pared gains in wake of newswire headline that

Germany's Scholz and Turkey's Albayrak did not discuss an IMF rescue.

- Risk-off tone has supported flattening in short sterling strip as blues rally

2-3 ticks while whites are steady to 1 tick higher