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TRADING WEAK AHEAD OF FOMC

GILT SUMMARY

Having sold off early in the session, gilts have lacked direction through the

afternoon, with yields holding a touch above yesterday's closing levels.

- The Sep-20 gilt future has edged down to 138.29 towards the bottom of

the day's range (L:138.21 / H: 138.56).

- Cash yields are 1-2bp higher on the day. Last yields: 2-year -0.0826%,

5-year -0.1171%, 10-year 0.1152%, 30-year 0.6252%

- The DMO earlier sold GBP3.50bn of the 0.125% Jan-23 Gilt and GBP2.75bn

of the 1.625% Oct-28 Gilt. The PAOF for the 0.125% Jan-23 Gilt was not

taken up, while a further GBP258.875mn of the 1.625% Oct-28

Gilt was sold.

- Data published this morning showed an uptick in mortgage

approvals in June (40k vs 35k consensus), supporting comments

from estate agents that activity in the property sector is picking up.

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