Its has been a relatively volatile.....>

GILT SUMMARY: Its has been a relatively volatile start to Super Thursday with

the Dec Gilt future contract trading in a 29 ticks range, albeit in illiquid

trade, as markets await key Bank of England Monetary policy decision at

1200GMT/0800ET. Yield curve is bear flattening as short-end underperforms.

- 2-yr Gilt yield is +1.9bp at 0.507%, 5-yr +1.7bp at 0.829%, 10-yr +1.6bp at

1.363% and 30-yr +1.4bp at 1.914% according to Trade web.

- Dec Gilt opened lower, before recovering quickly as markets saw a number of

bullish trades go through short sterling options, which were either looking for

a dovish rate hike or no rate hike at all.

- The future slipped back towards session lows though as UK construction PMI

rose more than expected and back into expansion territory and then weighed by

long-end supply from Spain and France.

- Markets are pricing in first hike for over 10-yrs and are expecting the

central Bank to indicate further rises but at a limited and gradual pace. MNI

PINCH calculates a 75% chance of a 2nd 25bp rate hike in May 2018

- 5-yr and 10-yr breakevens are 2bp wider, while swap spreads are 1bp tighter.