June gilt future opened sharply........>

GILT SUMMARY: June gilt future opened sharply higher but is paring those gains

as I type as markets digest the Fed decision to raise rates, amend the dot plot

curve slightly higher but take on board a dovish tone from Fed Chair Powell in

the press conference. Markets also looking ahead to Bank of England monetary

policy decision at noon today.

- Yield curve is slightly flatter as the long/ultra long-end outperforms with

2-yr yield 1.5bp lower at 0.911% and 10-yr yield 3bp lower at 1.501%

- The take on the Fed is that despite rising rates and the dot plot curve

slightly, Powell's comments appeared cautious and downplayed rise in 2019/2020

part of the dot plot curve.

- Attention is now turning to BoE rate decision, with majority of analysts

expecting the MPC to leave policy on hold, but indicate support for a May rate

hike. There are a handful of analysts though that see 2 dissenters calling for

an immediate rate hike at todays meeting. Risk is seen that there could be more

dissenters following strong labour report yesterday.

- Before BoE we have retail sales data with consensus looking for a rise of 0.4%