Gilts have opened lower taking cue.....>

GILT SUMMARY: Gilts have opened lower taking cue from mild weakness in US

Treasuries and long-end of JGBs overnight as BoJ trimmed purchases in that area

while risk sentiment remained broadly positive, likely helped by reduced

geopolitical tension between North and South Korean. Markets also digesting

comments from Fed officials. 10-yr Gilt yield is 1.5bp higher at 1.252%.

- Also overnight latest BRC like-for-like sales for December ticked lower to

1.4% y/y from 1.5% y/y as non-food sales fell by 1.4% y/y, the largest fall

since March 2008, however food sales did rise by 4.2% y/y.

- In domestic politics PM Theresa May's cabinet reshuffle did not quite go to

plan with a couple of ministers resigning and one refusing a new role. Although

with Johnson, Davis and Hammond all keeping their jobs, this was merely just

tinkering around the edges. 

- Brexit Secretary Davies has complained that Brussels planning a 'No Deal' on

Brexit is harming British business and breaches UK's rights as a member state is

likely to go down like a lead balloon in Europe.

- Swap spreads are marginally tighter while breakevens are circa 0.5bp wider