It has been a relatively quiet.........>

GILT SUMMARY: It has been a relatively quiet morning session with Gilts

squeezing higher, paring some of the sharp sell-off seen at the end of last

week, with the 10-year Yield seen hovering around 1.30%. Yield curve is bull

steepening with the front-end seen outperforming

- 2-yr Gilt yield seen -2.9bp at 0.426%, 5-yr -2.5bp at 0.728%, 10-yr -2.2bp at

1.30% and 30-yr -1.3bp at 1.904% according to Tradeweb.

- Gilts have recovered opening losses and squeezed higher, although there was

little direction seen overnight due to Japanese Holiday.

- HSBC changed their view on the Bank of England and now see the MPC raising

rates at the November 2017 and May 2018 meetings to bring interest rates to

0.75%, compared to no change this year or next previously.

- Markets will be listening to comments from BoE Governor Carney in Washington

this afternoon to see if there are hints on future monetary policy.

- Short sterling strip bear steepened at the opening but has since reversed

losses helped by light but consistent buying in white and red contracts.

- UK breakevens are tighter across the board with 10-yr 2.9bp lower.