Gilts opening higher, with the.........>

GILT SUMMARY: Gilts opening higher, with the 10-year part of the yield curve

seen leading the charge, as markets catch up following August Bank Holiday and

react to overnight news of N.Korea firing a missile over Japan, which has lead

to risk-off flows. 10-yr Gilt yield is 4.5bp lower at 1.009%.

- Markets also digesting the start of third round of Brexit negotiations in

Brussels, which have got off to a rather tense start with the EU's Michel

Barnier warned the UK that it needed to start negotiating "seriously". While UK

Brexit Secretary David Davies called on the EU to "show flexibility and

imagination", as they try and make progress on UK's exit from the EU.

- There is little macro-economic data from the UK this week, so attention likely

to be on the geo-political situation in Asia, Brexit press briefing from Davies

and Barnier on Thursday and US and Eurozone data throughout the remainder of the

week.

- Swap spreads are currently trading mixed with the 2-yr 1.3bp wider, while

15-year and above are marginally tighter. Breakevens though are tighter with

10-year and 30-year in the region of 1bp tighter.