Gilts have slipped lower at start of..........>

GILTS: Gilts have slipped lower at start of Wednesday trade, weighed by move

lower in JGBs, US Treasuries and German Bunds and brushing off latest Brexit

concerns. Although it is the 10-yr sector that is leading the move lower and

therefore pivoting the yield curve. 10-yr Gilt yield is 3.2bp higher at 1.365%,

with 2s/10s 0.9bp steeper and 10s/30s 0.7bp flatter.

- UK papers this morning are full of articles on Brexit, with PM May said to cut

short her holiday to meet with French president Macron. While the FT reports

that the EU "is willing to fudge crucial Brexit negotiations" in hope of

securing a withdrawal agreement in October. While SMMT warned that UK car

production would halve if there was a no-deal Brexit.

- On a more economic front, the Times reports that Chancellor Hammond is looking

into another round of spending cuts, with some departments' budgets seen being

cut by up to 5%. While shop price deflation eased in July to -0.3% from -0.5%

according to latest BRC index.

- Only data from the UK today is Jul Manufacturing PMI with consensus looking

for a slight slip to 54.2 from 54.4. Attention will then turn to FOMC decision