Gilts started the European session.....>

GILT SUMMARY: Gilts started the European session on the front foot and have

continued to rally since. At the time of writing 10y yields are 3.9bp lower on

the day at 1.287%, the lowest level for a week. The curve has bull flattened

with 2y yields 2.4bp lower on the day at 0.78%.

- The rally has largely been driven by poor European PMI data and concerns

surrounding the global economy, although gilts have seen bigger moves than

either Treasuries or Bunds.

- There has been little in the way of UK data this morning and BoE Governor

Carney appeared on a panel in Davos but gave little new insight on the state of

the economy or Brexit details except from saying that UK firms cannot prepare

fully for a no-deal Brexit.

- Press headlines continue to point towards an increasing chance that the UK

will stay in the EU past the current March 29 default exit date.