Gilts have slowly faded their..........>

GILT SUMMARY: Gilts have slowly faded their opening move higher, albeit in light

illiquid trade, with little data or newswire headlines seen to direct markets.

Yield curve is slightly bull steepening as the ultra long-end underperforms.

- 2-yr Gilt yield is -0.6bp at 0.829%, 5-yr -0.7bp at 1.166%, 10-yr -0.7bp at

1.492%, 30-yr & 50-yr -0.5bp at 1.918% & 1.705% respectively, according to

tradeweb.

- The Main event for Gilts will be the Spring Budget by Chancellor Hammond on

Tuesday and the start of the latest BoE APF re-investment programme today in the

3-yr/7-yr sector for Stg1.22bln and then the launch of a new 10-yr Gilt for

Stg2.5bln on Thursday.

- At the Spring Budget most analysts see borrowing for FY 2017/18 to come in

well below OBR forecasts and give the Chancellor some wriggle room for spending

in future years. When the budget announcement has been completed the DMO will

then release its initial Gilt remit for FY 2018/19 and once again analysts see

this falling by around Stg6bln compared to projections at the November Budget.

- Both breakevens and swap spreads are little changed so far today.