The Gilt made headway early on in the.........>

GILTS: The Gilt made headway early on in the session as weak construction PMI

data added to a reaction to the North Korean nuclear test.

- Over the weekend, there were reports that the UK would ultimately accept a

Brexit bill of Stg50bln but on Sunday, David Davis called this suggestion

'nonsense'.

- The best performing sector on the curve (just about) was the 3-7Y area i.e.

where the Bank of England conducted a Asset Purchase Reinvestment auction in the

afternoon. A large cover ratio at this operation briefly pushed the Gilt market

lower but did not undermine the 3-7 Year's relatively good performance. 

- About the only decent movement along the yield curve over a very dull session

was a 1.3bp rise in the 30Y real yield, with a lot of the damage done just

before the start of the Bank of England operation. 

- As the close approached, the 10Y gilt yield was down 0.3bp at 0.697% and 2-10Y

curve spread was unchanged.