Gilts are trading higher helped by.....>

GILT SUMMARY: Gilts are trading higher helped by FOMC statement last night, but

are off session highest levels due to upbeat trade survey from UK retailers.

- The belly of the yield curve is outperforming with 5-yr gilt 3bp lower at

0.55%, while 10-yr is 2.6bp lower at 1.201% according to Tradeweb.

- Gilts opened higher thanks to a dovishly interpreted FOMC statement overnight

that seamed in no hurry to raise rates again, and would probably announce

balance sheet reduction in September.

- Gilts slipped form session highs however as latest CBI Distributive trades

survey found retailers reporting net sales balance at +22 up from +12 in June

and were optimistic for strong growth in August as well.

- Elsewhere, the press are highlighting possible delays in Brexit talks, with

Home Secretary Amber Rudd announcing a "detailed assessment" on the economic

impact of EU and EEA migration, which could take over a year to complete. While

the EU has warned that talks could be delayed by 2-months because of UK's

refusal to engage with Brussels over the Brexit bill.

- Swap spreads are between 1bp and 2bp wider, while breakevens are 2-3bp tighter