Gilts moved lower today................>

GILT SUMMARY: Gilts moved lower today underperforming both Bunds and Treasuries.

- The Labour Party unveiled its manifesto today. There were few surprises with

promises to nationalise rail, mail, buses, energy firms, the broadband arm of BT

and water companies. They also promise to raise taxes on the "super rich"

(defined as anyone earning more than Stg125,000) and on workers earning more

than Stg80,000 along with big increases to corporation tax. They also pledge to

build 100k council houses and 50k social homes per year at a cost of Stg75bln

over the next 5 years, a 5% public sector pay rise and to create a "million

green jobs".

- This morning we also saw the release of UK public sector finances, which saw

higher borrowing than expected in October but with downward revisions to the

first half of the fiscal year. Although not immediately market moving, there is

some focus on the UK fiscal position following the increased gilt remit and

ahead of the upcoming election where fiscal spending is expected to increase.

- Gilt futures are down -0.25 today at 131.50 with 10y yields up 1.8bp at 0.746%

and 2y yields down -0.1bp at 0.561%.