Gilts have opened slightly lower as well,.....>

GILTS: Gilts have opened slightly lower as well, but it is the front end that is

seeing the largest moves so far and in turn bear flattening the yield curve as

markets look ahead to key UK service PMI and re-opening of 5-yr Gilt for

Stg3bln. UK 10-yr Gilt yield is 1.9bp higher at 1.476%.

- Markets also digesting FOMC statement last night and news that Brexit cabinet

rejected PM May's preferred customs arrangement with the EU.

- UK release the services PMI at 0930BST with analysts expecting it to pick in

April to 53.8 after March's PMI of 51.7 was attributed to the poor weather

stopping consumers going out to shop and eat.

- Attention will then turn to Eurozone flash inflation data and then a raft of

US data in the afternoon.

- Short Sterling strip is bear steepening as blue contracts tick lower by 1 to 2

ticks, but volumes are low.