A day of high political drama has......>

GILT SUMMARY: A day of high political drama has had limited traction in the

market, which had realised before Theresa May that the PMs time was up. However,

with a leadership race now looming, GBP markets could be heading for choppy

waters as the Conservative Party faces the choice between a hard or relatively

soft Brexiteer.

- The Jun-19 gilt future trades at 129.83, up 3 ticks from Thursday's close and

20 ticks off the day's high; L-H: 129.63-130.03.

- Gilt yields are broadly 0-1bps higher on the day. Cash yields (Last / 1d chg /

L...H): 2Y (0.636% / -0.2bp / 0.6297%...0.6422%); 5Y (0.7094% / +0.1bp /

0.7024%...0.7157%); 10Y (0.9606% / +0.8bp / 0.9511%...0.9656%); 30Y (1.523% /

+0.7bp / 1.5194%...1.5317%).

- The curve has steepened: 2s10s (31.4bp / 1.1bp / 30.6bp...31.8bp); 2s30s

(87.7bp / 1.1bp / 87.2bp...88.4bp)

- Short sterling futures have broadly rallied with reds & greens outperforming:

W (flat/-1.5 ticks); R (+ 1/1.5 ticks); G (+ 1/1.5 ticks); B (+ 0.5/1.5 ticks)