After gapping higher on the open.......>

GILT SUMMARY: After gapping higher on the open after yesterday's holiday, gilt

futures are around 0.50 above Friday's settlement level at 127.43, having moved

steadily higher throughout the afternoon. The curve has flattened out to around

the 10y mark with 10+ year yields down about 5bp relative to Friday's close.

- May's future and Brexit have again been the biggest talking points in the gilt

market today. Theresa May is meeting Graham Brady, the Chairman of the 1922

Committee where Brady is expected to push May to confirm the timetable for her

departure. Headlines today have suggested that Tory backbenchers favour May

leaving in June so that there is time for a new leader to be elected ahead of

the party conference in the autumn. It has also been suggested that if Boris

Johnson or Dominic Raab win a leadership contest that they will attempt to

negotiate the backstop with the EU - something that the EU has refused to

contemplate.

- Other headlines have focused on the Brexit talks between the Conservatives and

Labour with Labour allegedly wanting assurances that any deal agreed will be

binding so that it cannot be picked apart by a new leader.