Gilts have opened Friday modestly......>

GILT SUMMARY: Gilts have opened Friday modestly higher with the yield curve bull

flattening, as markets trade with a mild risk-off tone following terrorist

attack in Barcelona, continued concerns over the ability of the Trump

administration and further dovish comments from Fed officials.

- Reports that Trump is to close another council and some soft earnings weighed

on equities overnight. While the terrorist attack in Barcelona has raised fears

of disruption to holiday plans are also seen weighing on sentiment.

- Dovish comments from Fed Kaplan -- Fed can afford to be patient with raising

rates, and Kashkari -- still slack in labour market and therefore no need to

raise rates anytime soon, also supported opening bid in Gilts.

- Saying that though, Gilts have pared some of their opening gains as traders

look to take some profits. With little data from the UK or Eurozone today,

markets are likely to remain subdued and probably look ahead to NY open for some

directional ply.

- At the moment both swap spreads and UK breakevens are little changed.

- 10-yr Gilt is 1.3bp lower at 1.081%, while 2-yr are -0.6bp at 0.224%