There was some limited buying in the...>

GILT SUMMARY: There was some limited buying in the afternoon, but Gilts remain

close to session lows with curve bear steepening, heading into Wednesday's

close. While there has been a large pickup in Sep/Dec Gilt roll, mainly selling.

- 2-yr Gilt yield is +0.8bp at 0.234%, 5-yr +2.5bp at 0.515%, 10-yr +2.2bp at

1.107% and 30-yr +2.9bp at 1.772% according to Tradeweb.

- Gilts opened Wednesday modestly lower seen weighed by a mild risk-on tone as

equities opened in positive territory and EU periphery bonds ticked higher. But

temporarily recovered, taking cue from spike in German Bunds following Reuters

ECB source story that Draghi will not convey new policy message at Jackson Hole.

- However, UK unemployment dropping to 4.4% in June from 4.5% in May and a

surprise rise in total weekly earnings to 2.1% from 1.8% saw Gilts drop sharply

and eventfully hit fresh session lows. Real earnings though remained negative.

- Light buying then seen as NY session got underway, while Sep/Dec Gilt roll was

sold in size circa 75k, at 1.01, at around midday London time.

- Swap spreads are tighter across the board. 5-yr and 10-yr breakevens have

widened by around 1.6bp, while 30-yr is +1bp.