1.   Gilts have performed better than the core bund market last week, yet have a lower risk profile than the southern markets such as Italy and Spain.

2.   German government bonds rose as the dollar stabilized against the deutsche mark, bringing a lift to the bund market.

3.   Gilts were also boosted by a stronger bund market, which rose following a weaker-than-expected German June inflation report.

4.   In the absence of domestic economic reports, the U.S. Treasury and German bund market were the main factors impacting on gilt prices today.

5.   Still, the U.S. Treasury and German bund market are seen as the main factors expected to impact gilt prices next week.

6.   Traders said a stronger German bund market also helped underpin gilts.

7.   Traders said the report had little effect on the bund market.

8.   Zurek said the German bund market will probably stay calm from now until Christmas.