June Gilt future has nearly reversed...>

GILT SUMMARY: June Gilt future has nearly reversed all of its opening move

higher, weighed by move lower in German Bund and US Treasuries in the afternoon.

Short-end of the yield curve holds onto around half of its gains though,

underpinned by BoE Carney comments last night.

- 2-yr gilt yield last -4.9bp at 0.845%, 5-yr -3.8bp at 1.179%, 10-yr -1.1bp at

1.498%, 30-yr -0.1bp at 1.897% and 50-yr -0.1bp at 1.697% according to Tradeweb.

- It was Carney carnage at the Gilt open with the June future opening 55 ticks

higher and short sterling strip up 8/9 ticks in knee-jerk reaction to BoE

Governor Mark Carney comments over night which appeared to suggest that May rate

hike was not necessarily a done deal.

- Markets quickly pared gains, especially in Gilts, as move looked over done and

they turned their focus to expected hawkish comments from BoE Saunders. Saunders

did not disappoint saying that domestic cost pressure were gradually building

and wants earlier tightening than current market pricing.

- Latest MNI PINCH sees chance for a rate hike for May at 47.5% compared to 

81.5% seen at yesterday's close with markets now seeing August as most likely.