Gilts have opened marginally lower.....>

GILT SUMMARY: Gilts have opened marginally lower from Thursday close with yields

circa 0.5bp higher across the board taking cue from mild sell-off in US

Treasuries overnight. 10-yr Gilt yield is 0.8bp higher at 1.317%.

- Overnight news was a little thin on the ground and with limited Eurozone and a

dearth of UK data released this morning markets are seen treading water until NY

session and the release of US inflation and retail sales data.

- Markets also digesting the news coming out off Germany this morning that

Merkel's conservatives and SPD parties have agreed a preliminary deal on

coalition talks.

- Short sterling strip is steady to higher with curve marginally flatter as Blue

contracts outperform, however volumes are very light. Both swap spreads and

breakevens are both little changed so far as well and waiting for next

directional move.

- Equities are also having a quiet start to the last trading day of the week,

while Sterling is a touch stronger against the US Dollar but slightly weaker vs

the Euro.