Gilts have opened on the front foot...........>

GILTS: Gilts have opened on the front foot supported by renewed US/China trade

tensions overnight. 10-yr Gilt yield is 2bp lower at 1.28% according to Tradeweb

and is currently leading the rest of the curve lower with 2s/10s 0.8bp flatter

and 10s/30s 0.7bp steeper.

- US announced last night that it may put 10% trade tariffs on an additional

$200bln worth of goods imported from China, while China vowed to retaliate.

- Closer to home, there are some good new and bad news for PM May. The bad news

is that the Eurosceptics within her own party are looking into the possibility

of vetoing the Brexit plan. While there is more positive news coming out from

Europe with German Chancellor Merkel says it si a solid step forward.

- There is a dearth of UK data today and comments from BoE Governor Carney in

Massachusetts later will not be reported, so attention likely to remain on

trade, NATO meeting and Brexit. Markets also waiting on new 2041 IL syndication.

- Short sterling strip is steady to 3 ticks higher, curve flatter as blue

contracts rally the most.