- Gilt yields have broadly drifted.....>

GILT SUMMARY: - Gilt yields have broadly drifted lower during the session and

the curve is a touch flatter.

- The benchmark 2-year gilt yield trades at 0.828% down from a high of 0.838%

and the 10-year trades at 1.581% down from 1.596%.

- The 2s10s spread has narrowed to 74.8bps from 75.9bps, while the 2s30s has

traded down to 108.4bps from 109.3bps.

- On the back of this week's upside CPI surprise, inflation breakevens have

edged higher. The 5-year breakeven has ticked up to 3.096% from 3.079% and the

10-year is up to 3.123% from 3.104%.

- Following a flurry of activity yesterday in which we reported on over 200k

short sterling option flows, volume today has been back to more normal levels. 

- UK Public Sector Net Borrowing for August came in slightly above expectations:

Stg. 5.9bln vs 3.0bln survey.

- The EU leaders summit in Salzberg has already thrown up another setback for UK

Prime Minister Theresa May after the Member States unanimously rejected the

'Chequers Deal'.