It has been a disappointing............>

GILT SUMMARY: It has been a disappointing afternoon, with gilts crashing lower

led by the short-end and in turn slightly bear flattening the yield curve. Gilts

seen weighted by stronger than expected US ADP and MNI Chicago Business

barometer.

- 2-yr Gilt yield is +3.4bp at 0.641%, 5-yr +2.5bp at 0.995%, 10-yr +2.7bp at

1.488%, 30-yr +2.8bp at 1.929% and 50-yr +2.5bp at 1.717%.

- With limited UK data or update on Brexit it was outside factors that

influenced London afternoon trading session, although there were two analyst

recommendations to go short long-end of UK Gilts either vs US Treasuries or as

part of a Gilt curve steepener.

- Gilts were trading modestly higher, curve bull flattening, supported by

overnight recovery in USTs and strong opening in Bunds. Sentiment reversed

however, as NY traders got to their desks with the sell-off seen in the 3yr to

5-yr sector of the curve, before extending losses following US ADP & MNI Chicago

report. Further selling was then seen around 1-hour before close

- Swap spreads are a touch tighter while 5-yr breakevens are 1bp wider.