Gilts are trading modestly lower.......>

GILT SUMMARY: Gilts are trading modestly lower with the 2-year part of the yield

curve the worst performer as markets continue to digest Thursday's BoE monetary

policy announcement and then BoE Broadbent's comments early this morning.

- 2-yr Gilt yield is +1.1bp at 0.237%, 5-yr +0.7bp at 0.543%, 10-yr +0.6bp at

1.161% and 30-yr +0.4bp at 1.805% according to Tradeweb.

- Gilts opened marginally higher as markets continued to digest the non-hawkish

take of the BoE monetary policy decision on Thursday and comments from Governor

Mark Carney -- sluggish growth and brexit consequences beginning to build.

- Prices reversed though as market took notice of early morning comments from

BOE Broadbent saying that he thinks the UK economy was better placed and could

cope with an interest rate hike. But did acknowledge Brexit is putting companies

off new investment.

- The comments weighed on the short-end of the yield curve more as markets

priced in slightly higher chances of a rate rise within the next 2-years.

- Swap spreads are steady to marginally wider, while breakevens are also little

changed.