Gilts have opened modestly lower.......>

GILT SUMMARY: Gilts have opened modestly lower with the long-end seen taking the

brunt of the selling and therefore steepening the yield curve. UK 10-yr yield is

currently 2.4bp higher at 1.088%.

- The move is despite growing concerns over the Brexit talks and perceived lack

of progress being made on the three main core issues that the European Union

insist on resolving before moving onto any form of trade talks.

- The UK Brexit department is expected to release another position paper later

today, but this is not expected to placate Brussels demands for more information

on EU citizen rights, or the Brexit Bill.

- Looking ahead, markets will be watching the the release of latest UK borrowing

figures at 0830GMT closely for any sign that public finances are slipping

further from OBR forecasts. MNI median forecast is for PSNBex to come in at

Stg0.9bln, down from June's Stg6.9bln. However, with a sharp rise in UK T-bill

issuance seen over the last few weeks, risk is seen to higher level of

borrowing.