Gilts are trading modestly higher......>

GILT SUMMARY: Gilts are trading modestly higher but off session highs, with the

yield curve slightly flatter due to concern about possible more personnel

changes in the Trump administration, downward revision to Eurozone inflation and

Brexit transition talks that look to be going to the wire.

- Volume and range though have been very light and tight with the Gilt future

trading in a 20 tick range and volume down around 10%. 

- 2-yr Gilt yield is -0.2bp at 0.803%, 5-yr -0.5bp at 1.125%, 10-yr -1.0bp at

1.425%, 30-yr -1.1bp at 1.797% & 50-yr -1.0bp at 1.583%, according to Tradeweb.

- Eurozone final inflation was revised down to 1.1% y/y from initial flash

estimate of 1.2% y/y and supported rally in Gilts to session highs. While on

Brexit the EU have said that there will be no transitional deal if there is no

deal on the Irish boarder.

- Breakevens are steady with the exception of the 5-yr which is 1.8bp wider

despite sterling dipping lower. Swap spreads are little changed.