It has been a rather uneventful........>

GILT SUMMARY: It has been a rather uneventful session in Gilts Thursday with

prices opening sharply lower and then pretty much stayed there since, with the

Dec Gilt future contract trading in tight 22 tick range with volumes below

average.

- The 10-yr part of the yield curve is seen leading the underperformance with

yield 4.4bp higher at 1.376% according to tradeweb, while 2-yr is only 2.0bp

higher and 30-year 2.5bp higher. 

- There was only a marginally recovery in Gilts when latest UK public sector

borrowing numbers came in below consensus. The UK borrowed Stg5.669bln in

August, below the Stg7.3bln expected and lower than the Stg6.92bln in Aug 2016,

helped by rise in VAT receipts.

- Gilts also found a bid in wake of newswire headline that US is to add more

sanctions on North Korea, however, markets were reluctant to push prices higher,

with sellers seen coming in at any little sign of up tick in price.

- UK breakevens have widened with 10-yr & 30-yr 1.5bp & 2.5bp higher, while swap

spreads are mixed with 5-yr and 10-yr around 1bp tighter & 7-yr 3bp wider.