Gilts are opening modestly higher in...>

GILT SUMMARY: Gilts are opening modestly higher in first trading since Friday's

early close, with the yield curve ever so slightly flatter as the short-end of

the curve seen held back by sharp rise in crude oil and copper yesterday. 10-yr

Gilt yield is 1.5bp lower at 1.226%.

- Focus in illiquid markets seems to be on the rise in oil yesterday, due to an

explosion of a Libyan oil pipeline, and steady rise in commodity prices in

general. Also the rise in geo-political tension in Asia with new sanctions on

North Korea being imposed and the country calling this an act of war.

- There is some concern over consumer spending power as latest Springboard

survey shows sharp drop in visits to shopping centres and the high street on

Boxing Day, while the Resolution Foundation said UK's pay squeeze will end next

year but any meaningful pay rise still to be seen.

- There is some data from the UK today, but this is limited to just mortgage

approval data for November from UK Finance which is unlikely to get the markets

too excited. However in the afternoon there is US consumer confidence and

pending home sales.