Gilts are opening modestly lower.......>

GILT SUMMARY: Gilts are opening modestly lower with yield around 1.8bp higher

across the curve as markets continue to trade with risk-on sentiment as the UN

unanimously agreed to impose new sanctions on North Korea and the Repeal Bill

passed its 2nd reading in House of Commons last night.

- It was a relatively close call with 326 votes to 290 but the house of commons

is backing the EU repeal bill put forward. This bill, which ends the supremacy

of EU law in the UK and makes them domestic, UK laws means Brexit plans can move

onto the next stage.

- Looking ahead the main attention will be on UK August inflation and producer

price index released at 0930GMT. MNI median forecast is for CPI to tick higher

to 2.7% y/y from 2.6% y/y supported by rise in fuel prices during August and

possible continued pass through of a weaker currency. Risk is seen of a 2.8% y/y

print.

- Both UK swap spreads and breakevens are currently little changed, while

Sterling is slightly stronger vs the Euro and the US Dollar.