Gilts are trading marginally higher....>

GILT SUMMARY: Gilts are trading marginally higher at start of Wednesday trade,

likely on the back of move in German Bunds due to a lack of direction seen

overnight and relatively quiet political scene in the UK for now. 10-yr Gilt

yield is 0.7bp lower at 1.296%

- There is a dearth of UK data released today, so attention likely to be on EMU

final CPI at 100GMT, comments from BoE's Saunders at 1145GMT and then Fed's

Evans and Mester later this afternoon.

- Michael Saunders was one of the first members to call for a rate hike last

year and a clear hawk on the MPC, so his comments today could be of interest to

the markets on likely future path of rates.

- Domestic politics is never dull for too long and the performance of PM May at

Prime Minister Questions and the progress of the EU Withdrawal Bill later today

will be keenly watched.

- Both breakevens and swaps spreads are little changed so far this morning.