Gilts opened lower as it appeared......>

GILT SUMMARY: Gilts opened lower as it appeared that the risk-off trade was

reversing in the Asian trading session. The contract quickly fell to a low of

127.21 before buyers appeared and quickly rose to 127.45. There is virtually no

net yield change for the 10-Year Gilt benchmark.

- Economic data included a decline in a RICS July house price index to +1, the

lowest since 2013 and down from +7 in the prior month.

- Manufacturing output data for June were close to consensus at 0.6%Y/Y,

although the IP data came in light of the consensus. The data had little impact

upon the Gilt market.

- Volumes have been exceptionally thin but for a small flurry of trading at the

open and a small buyer in the 127.30 area as the market reacted to the opening

of equity markets.

- The FTSE is down 78 points (1.06%) and is easily the worst performing major

equity market. However, 15 companies start trading ex-div today and this has

taken around 41 points off the index.