Gilts have following German bunds sharply.....>

GILTS: Gilts have following German bunds sharply higher Friday morning with the

yield curve also seen bull flattening as disappointing data and rise in global

trade tensions underpin risk-off sentiment. 10-yr Gilt yield is 4.6bp lower at

1.364% according to Tradeweb.

- Elsewhere, newswire take on the Brexit showdown seen yesterday is that it was

a hallow victory for the Brexiteers inside the cabinet and that PM May is

forging a path that is likely to tie UK hands with the EU for a very long time.

- The only data released Friday is the BoE/TNS inflation survey at 0930BST

however, this is unlikely to move the markets too much. So main event is

expected to be the run up to the opening of the G7 summit in Charlevoix, Quebec

later today following the war of words on trade from Trump/Macron.

- Short sterling strip has opened steady to higher, curve flatter as green and

blue contracts rise by 3 to 4 ticks while white contracts remain steady.

- Markets now seen pricing in a 63.5% chance of a 25bp rate hike in August

following BoE Ramsden comments yesterday that growth is set to exceed its speed

limit.