Gilts are paring back some of their....>

GILT SUMMARY: Gilts are paring back some of their risk-on move seen Tuesday as

the geo-political tensions over North Korea's missile test eases for now. Uk and

European stocks markets have opened higher, while cable has slipped back towards

$1.29, but is relatively steady vs the Euro.

- While UK high street deflation eased in August, with non-food deflation at its

shallowest since April 2013, the BRC's latest Shop Price Index (SPI) showed,

which is also seen weighing on Gilts

- 10-year Gilt is seen leading the underperformance at 3bp higher at 1.025%,

leading the curve to pivot but in the opposite direction to Tuesday. 2s/10s is

0.7bp steeper & 10s/30s 0.6bp flatter.

- Looking ahead BoE July M4 money supply and lending to individuals data is

released at 0930BST. Markets will also be keeping an eye on German flash CPI for

August released early afternoon.

- So far there is little movement in UK swap spreads, however breakevens are

around 0.7bp wider.