Gilts traded weaker early in the.......>

GILT SUMMARY: Gilts traded weaker early in the session alongside the broader

risk-on mood in the wake of the Fed's planned purchases of corporate bonds, and

indications that the Trump administration is drawing up a USD1trn infrastructure

spending plan.

- A surprisingly sharp surge in US retail sales, which overshot expectations by

a considerable margin, further fuelled the risk rally. Gilts initially sold off

on the release, but subsequently clawed back some losses.

- The Sep-20 gilt future now trades at 136.92, near the middle of the day's

range.

- Cash gilt yields are 1-3bp higher on the day with the curve slightly bear

steepening. Current yield levels: 2-year -0.033%, 5-year 0.0146%, 10-year

0.2249%, 30-year 0.6289%.

- Focus shifts to the BoE meeting on Thursday where the MPC is widely expected

to increase asset purchases.