Although no significant policy.........>

GILT SUMMARY: Although no significant policy announcements are expected at the

BoE meeting today, a dovish shift in the official economic forecasts would

compound the market reaction to this morning's European Commission economic

forecast report.

- Energy Minister Andrea Leadsom has stated this morning that the government

still plans to present its Brexit motion to parliament on February 14 and that

PM May is negotiating a revised deal with the EU. However, the EU has put on a

united front in recent days, sticking rigidly to its position in refusing to

reopen negotiations of the Withdrawal Agreement.

- Gilts rallied on the back of the EC's downbeat global economic assessment with

yields in the belly of the curve down ~3bps on the day. Current yield levels:

2-year 0.712%, 10-year 1.184%, 30-year 1.703%.

- The Mar-19 gilt future trades at 123.94, 7 ticks off the high.

- Inflation breakevens have had a lift this morning with the 5-year benchmark

trading up to 3.162% from a low of 3.137%.

- The short sterling futures strip is 1.0-3.0 ticks higher.