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Short End Weakening

GILT SUMMARY

Gilts sold off from late morning with the short-end of the curve underperforming.

  • Last yields: 2-year -0.0444%, 5-year -0.0751%, 10-year 0.2001%, 30-year 0.7352%. The 2s10s spread is 2bp narrower on the day.
  • The Dec-20 gilt has veered sideways through the day and currently trades at 136.34, near the bottom of the day's range (L: 136.28 / H: 136.55).
  • Short sterling futures are broadly 0.5-1.5 ticks lower in whites/reds/greens/blues.
  • The DMO earlier sold GBP2.75bn of the 0.125% Jan-28 gilt. A further GBP687.499mn was taken y through the PAOF.
  • Data published this morning showed higher than expected mortgage approvals in August (84.7k vs 71.3k).
  • Looking ahead, the final estimate of Q2 GDP will be published tomorrow.

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