Gilts have opened much weaker..........>

GILT SUMMARY: Gilts have opened much weaker Wednesday, seen weighed by overnight

comments from the UK's National Institute of Economic and Social Research on

it's call that the Bank of England should raise rates in the first quarter of

2018

- 10-yr Gilt yield is 2.7bp higher at 1.235%, underperforming Bunds by 1.6bps

and US Tsys by 0.8bps.

- NIESR called on the Monetary Policy Committee to open up a debate on policy

normalisation and forecast UK economic growth to pick up in the second half of

2017 and for inflation to peak at 3% in Q4 2017, before falling back to 2%

target in Q4 2019.

- Short sterling strip has ticked lower, with green and blue contracts seen

leading the curve lower.

- Looking ahead, there is UK construction PMI for July is released at 0830GMT

with consensus seeing a small drop to 54.0 from 54.8 in June.