The Gilt contract opened firmly and....>

GILT SUMMARY: The Gilt contract opened firmly and although the Gilt contract

squandered some of those initial gains, the movement was mostly sideways until

the US inflation bombshell later in the session.

- The strong US CPI data dragged the entire bond complex lower and all that can

be said is that EGBs and Gilts were remarkably resilient. The 10Y Gilt yield

jumped 4bp. This compared to a 7bp move in the 10Y UST at around the same time.

After the shock of the data, Gilts recovered some of the lost ground, while the

Treasury market remained soft.

- There was no data and the much anticipated speech by Foreign Secretary, Boris

Johnson did not produce any fresh salvos against May. 

- Heading into the close, the 2Y Gilt yield was -1.4bp at 0.688%, the 10Y +0.4bp

at 1.622%.

- There was no Gilt supply today but the DMO sells Stg2.25bln of the Gilt 1.75%

2057 in a very busy EGB supply day tomorrow.