There was only a small upward..........>

GILT SUMMARY: There was only a small upward reaction to Gilts in wake of softer

than expected US core inflation data, but even that was faded later in the

afternoon, and look set to close mixed with the curve flattening.

- 2-yr Gilt yield is +0.2bp at 0.473%, 5-yr +0.6bp at 0.811%, 10-yr -0.8bp at

1.37% and 30-yr -1.7bp at 1.927% according to Tradeweb.

- Earlier, Brexit transition period talk created decent price swings as markets

tried to price in hope of progress being made by end of the year, but little net

direction was seen with the European Leaders summit next week the next key dates

in the diary.

- Juncker though reminded the UK that the Brexit process will take longer than

it thinks dashing some of those hopes. However Chancellor Phillip Hammond said

in Washington that he was optimistic a transition deal could be agreed as early

as Q1 2018, adding that is when businesses will start taking "key decisions".

- UK breakevens are marginally tighter while swap spreads are mixed but little

changed.