Gilts are trading little changed.......>

GILT SUMMARY: Gilts are trading little changed going into NY session, having

pared earlier gains in wake of perceived stronger than expected retail sales,

however volume has been light in subdued summer holiday trading.

- 2-yr Gilt yield is +0.5bp at 0.237%, 5-yr +0.3bp at 0.515%, 10-yr +0.2bp at

1.107% and 30-yr +0.5bp at 1.775% according to Tradeweb.

- Gilts initially opened on a higher footing supported by release of FOMC

minutes last night that highlighted concerns over lower inflation and when the

next interest rate hike should be, but agreement on balance sheet reduction.

- Sep Gilt though was capped at around yesterday's high of 127.76, with price

actually starting to drift lower ahead of UK retail sales data, before spiking

lower in knee-jerk reaction to higher than expected +0.3% m/m outcome. There was

some pull back as markets noted downward revision to June number, however prices

slipped further as attention turned to ECB minutes and US jobless claims.

- Swap spreads are steady to wider, with the 10-yr +1.2bp at 7.7bps, while UK

breakevens are around 1bp wider across the board.