Gilts have begun Thursday..............>

GILT SUMMARY: Gilts have begun Thursday steady-to-lower ahead of UK retail sales

data, 10-Yr Gilt issuance, and the EU Salzburg summit.

- The Dec 18 Gilt future is up 1 tick at 120.68, with the cash curve a little

flatter: 2-Yr yield is up 0.3bps at 0.847%, 5-Yr is up 0.2bps at 1.192%, 10-Yr

is up 0.2bps at 1.61%, and 30-Yr is up 0.1bps at 1.959%.

- Focus is on today's EU informal leaders` summit in Salzburg, with little

progress being reported on the Brexit agreement following PM May's dinner with

counterparts Wednesday night.

- Short sterling futures are trading mixed after Wednesday`s drop, with

contracts out to Sep19 down 0.5-1.0 ticks, and a few 2021 futures up a tick.

- Issuance up later with DMO re-opening 1.625% Oct-28 Gilt for Stg2.75bln.

- Data highlight Thursday is UK Aug retail sales at 0930BST.

- Our data team notes that a blistering July was flattered by one off events

such as the World Cup, so there may have been a correction in August. The

previous m/m reading of 0.7% and 0.9% excluding fuel in July is expected to

decline in August by 0.3% and 0.4% respectively.