Gilts have opened marginally lower.....>

GILT SUMMARY: Gilts have opened marginally lower with the yield curve bear

steepening as the long-end underperforms, albeit in light illiquid trade so far,

as political concerns in the UK wane slightly. 10-yr Gilt yield is 1.2bp higher

at 1.215%.

- UK Politics is looking slightly more stable following PM Theresa May saying

that she has full support of the Cabinet yesterday and as The Times says latest

poll gives the Conservatives a 1 percentage point lead over Labour, the first

lead since the election. It appears PM May's Brexit deal has improved her

popularity among voters and reduced fears of a leadership contest.

- Today is the start of a raft of UK data that is likely to have an impact on

the Bank of England MPC members who are meeting today and tomorrow and who will

give its monetary decision on Thursday. First up is inflation and producer

prices data for November, with consensus seeing CPI and core CPI remaining

steady at 3.0% y/y and 2.7% y/y respectively. Tomorrow sees Labour market data

and on Thursday it is retail sales.

- Breakevens are so far little changed following Monday's sharp tightening move