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UK Risk Sentiment Receives Boost

GILT SUMMARY

Having initially opened lower, gilts have lacked direction with yields drifting slightly lower.

  • News on the continued easing of lockdown restrictions, coupled with the perceived reduction in risk around a second Scottish independence referendum after the SNP failed to get a parliamentary majority in Scottish elections, have contributed to a positive shift in sentiment.
  • Gilt cash yields are broadly 1-2bp higher. Last yields: 2-year 0.0336%, 5-year 0.3199%, 10-year 0.7893%, 30-year 1.3326%.
  • The Jun 21 gilt future trades at 128.23, 3 ticks off the day's high.
  • The BoE purchased GBP1.147bn of short-dated gilts with offer-to-cover of 3.35x.
  • Looking ahead, Wednesday sees the release of the preliminary Q1 GDP pint alongside monthly data for industrial production, construction output, index of services and international trade for March.

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