Appearing to scupper efforts by UK.....>

GILT SUMMARY: Appearing to scupper efforts by UK PM Theresa May to secure a

sufficiently long Brexit extension to get her deal passed in parliament, French

President Emmanuel Macron has indicated France's opposition to an extended

delay. Moreover, Macron has warned that if Westminster votes down May's deal

again, the UK would be heading for a no-deal exit.

- The Bank of England kept policy unchanged as expected. A BoE survey of ~ 300

companies showed that 80% of firms were ready for a no-deal, up from 50% in

January.

- The gilt rally has extended into the afternoon with yields now 4-9bp lower on

the day with considerable flattening pressure on the curve. Current yield

levels: 2-year 0.690%, 5-year 0.821%, 10-year 1.067%, 30-year 1.552%. The 2s10s

spread has narrowed to 36.7bp from a high of 42.0bp.

- The Jun-19 gilt future trades at 128.54, 6 ticks off the high.

- The short sterling futures strip has flattened significantly with greens/blues

now 8.5-9.5 ticks higher on the day.