RBC notes the front-end of the UK curve.....>

UK VIEW: RBC notes the front-end of the UK curve is now at its year-to-date

lows, and also appears too flat vs. the outright market level.

- "Arguably, part of this flattening could have been driven by international

factors, which are causing a global risk-off move. But we would argue, that if

these global factors were to influence the BoE's decision, the market should

price out rate hikes baked into the curve in 2018 as well," RBC wrote. "This

would therefore still serve to steepen the money market curve, given the degree

of flattening we have seen already," added RBC.

- RBC said it judges the money market curve "being too flat here", and "prefer

positioning for a steeper Dec-18/Dec-19 short sterling curve, which provides a

positive 3m carry/ roll of 2bps."