Gilts have opened sharply lower, led...>

GILT SUMMARY: Gilts have opened sharply lower, led by the 4.2bp move higher in

the 10-year yield as markets digest Fed FOMC decision last night to start

balance sheet reduction and left prospect of a rate hike in December.

- Both the 2-yr and 30-yr part of the yield curve is faring a lot better though

and are only 1.1bp and 1.9bp higher respectively.

- There has not been much UK news overnight, however attention will be turning

to the cabinets Brexit meeting this morning and is expected to sign off on May's

Florence speech, which has been described as open and generous, however weather

the EU see it that way will be another matter.

- Data wise, UK release public sector borrowing for August at 0830GMT, with

consensus seeing net borrowing ex banks rising sharply to stg7.1bln from

-Stg0.2bln seen in July.

- UK breakevens have opened marginally wider with both 10-yr and 30-yr 1.0bp

higher, while swap spreads are mixed with 5-yr and 10-yr around 1bp tighter

while 7-yr is shown 2.3bp wider.