- The gilt sell-off petered out by.....>

GILT SUMMARY: - The gilt sell-off petered out by mid-morning, with the pull back

at the longer end putting a stop to curve steepening. 

- The benchmark 2-year gilt trades at a yield of 0.833% down from a morning high

of 0.846%, while the 10-year trades at 1.594% down from 1.603%.

- The 2s10s spread trades at 75.3bps from a low of 74.2bps.

- Inflation breakevens are broadly unchanged with the 5-year benchmark trading

at 3.211%. 

- Short sterling futures are flat to 2.0 ticks lower. We have seen a moderate

amount of short sterling option flow, with the stand out being 16k of the Jan19

1yr mid-crv 99.125 call.

- Data has been mixed this morning. Net consumer credit for August was a touch

weaker (Stg1.1bln vs Stg1.3bln survey) while M4 money supply slowed sharply to

1.2% Y/Y from 2.1% in July. The UK manufacturing PMI beat expectations for

September at 53.8 vs 52.5 survey.