In a nutshell, the Gilt market went....>

GILT SUMMARY: In a nutshell, the Gilt market went up and then down such that the

net change in yields is close to zero along the entire length of the curve.

- Likewise, breakevens and real yields are displaying almost no net movement.

- The initial rise in the Gilt market began at the front end of the German curve

as a bid to the Schatz spread up the curve. The Bund-Tsy spread hit a new 30Y

high and this appeared to be the catalyst for further Bund purchases that aided

the Gilt also. However, the decline in sterling as month-end index change

selling began also prevented Gilts from staging a full-on reflection of the Bund

curve movement.

- The DMO successfully sold GBP600mln of the IL Gilt 0.125% 2056 with a

respectable cover of 2.03x. Given the recent decline in long dated breakevens,

demand had been expected to be firm. 

- Looking ahead, the US has only limited data, most important being the

conference board consumer confidence data. Most attention is likely to remain on

the equity market volatility.

- The 10Y Gilt yield was last unchanged at 1.44%.