Price action was a little subdued in...>

GILT SUMMARY: Price action was a little subdued in the afternoon with Gilts

overall edging higher despite decent US data, possible resumption of US/China

trade talks and positing ahead of Fed FOMC and BoE MPC policy decision on

Wednesday and Thursday respectively. Gilt curve remains modestly flatter as

ultra long-end outperforms the rest of the curve.

- 2-yr Gilt yield is -1.2bp at 0.775%, 5-yr -1.4bp at 1.062%, 10-yr -1.7bp at

1.335%, 30-yr -2.1bp at 1.777% & 50-yr -2.6bp at 1.628% according to Tradeweb.

- Gilts attempted a recovery after first set of US data (personal spending) came

pretty much in-line with expectations, however, a Bloomberg headline that US and

China might resume trade talks sent Gilts back towards session lows. A surprise

rise in the Chicago PMI eventually weighed on Gilts as well.

- Gilts though regained some of the lost ground as markets looked ahead to Fed

FOMC and BoE MPC monetary policy decisions tomorrow and Thursday.

- Short sterling futures are steady to 1 ticks higher with exception of Jun22

contract which is 2 ticks higher. Swap spreads are 1-2bp wider and breakevens

are also modestly wider.