With a lack of direction seen from.....>

GILT SUMMARY: With a lack of direction seen from the UK it has been events in

Europe that have influenced the Gilt market Wednesday. Having managed to squeeze

higher at the start of trading, Gilts pared gains, taking cue from fall in

German Bunds following comments from ECB President Draghi and a disappointing

30-yr Bund auction.

- The middle to long-end of the curve have managed to hold onto some gains, in

turn flattening the yield curve, as domestic political tensions rises as Russia

did not respond to UK ultimatum on the spy poising investigation with PM May

expected to announce any repercussions later today.

- 2-yr Gilt yield is -0.1bp at 0.834%, 5-yr -0.4bp at 1.161%, 10-yr -0.8bp at

1.476%, 30-yr -1.5bp at 1.868% & 50-yr -1.6bp at 1.662%, according to tradeweb.

- Breakevens are circa 1bp wider across the curve, while swap spreads are

slightly tighter with the exception of the 2-yr which is 0.8bp wider.

- Markets attention now turning to US retail sales data, BoE APF reinvestment

buyback in the 7-yr-15-yr sector for Stg1.22bln and any headlines on changes to

Trump administration and/or trade policies.