It took slightly longer, but Gilts.....>

GILT SUMMARY: It took slightly longer, but Gilts eventually took cue from higher

move in US Tsys and are set to close near session highs. 10-yr Gilt still lags

move in both US Tsy and German Bunds by 0.8bp and 2.2bp respectively however.

- 2-yr Gilt yield is -1.9bp at 0.25%, 5-yr -2.1bp at 0.57%, 10-yr -3.1bp at

1.199% and 30-yr -3.8bp at 1.825% according to Tradeweb.

- Gilts opened lower however, taking cue from soft US Treasuries overnight,

continued strength in the pound vs US Dollar and the upcoming 10-yr Gilt

re-opening auction for Stg2.25bln. 

- Gilts then saw some selling in wake of stronger than expected UK mfg PMI (55.1

vs consensus of 54.4), but quickly recovered in run-up to 10-yr Gilt auction and

then extended gains afterwards in wake of strong demand.

- Gilts faded badly during NY morning session, tracking US Tsys lower following

personal spending and PCE data. Volume was low though. Gilts were then slow to

react to sharp recovery in US Tsys, reluctant to get long ahead of BoE Super

Thursday, but eventually broke to fresh session highs towards end of day

- Swap spreads touch tighter except 2yr, while breakevens are circa 1bp tighter.