Gilts hopped on the back of the........>

GILT SUMMARY: Gilts hopped on the back of the sharp drop seen in German Bunds,

with yields higher and curve steeper, but faring much better than its European

neighbour as strong demand at it's 20-yr IL gilt re-opening supported UK bonds. 

- An exceptionally strong CBI report saw Sep retail sales volume growth hit 2

year high and did not help an already bearish market. 

- 2-yr Gilt yield is +1.4bp at 0.461%, 10-yr +6bp at 1.39% according to

Tradeweb. 

- Rating agency DBRS' comment that the UK's current AAA rating "could come under

pressure" if there is "policy uncertainty and changes to the economy that stem

from the UK's new trade arrangements with the EU result in significant output

loss", was also seen underpinning Gilts. 

- Gilts opened modestly lower and then extended losses, hitching a ride on the

German Bund sell-off. Speculation on the move lower was on expectations o US

Trump's tax reform speech later today. 

- The UK's DMO sold Stg950mln 0.125% March 2036 IL Gilt, with bid-to-cover

jumping higher, as real-yield drops, never-the-less Gilts recovered off lows.