On today's 5-yr Gilt re-opening auction.......>

GILTS: On today's 5-yr Gilt re-opening auction both RBC and Citi say that the

Jul-23 gilts has cheapened on the curve and that the 2s/5s/10s fly is at all

time cheap levels.

- Both also agree that 5s/10s asset swap box is at or near historic lows due

mainly to recent political turmoil in Italy.

- On A cross market basis RBC say that 5-yr Gilt/Tsy spread is at its lows while

compared to 5-yr Bobl its towards this years highs. While Citi say the 2s/5s

Gilt spread has steepened compared to both German and US Tsys since March and

both box spreads are very close to their steepest levels this year.