Cabinet Office Minister David..........>

GILT SUMMARY: Cabinet Office Minister David Lidington has warned Conservative

eurosceptics that if PM Theresa May's deal is not passed then the government

would need to seek a lengthy Brexit extension. 

- While this could strike a chord with the DUP and ERG after parliament voted in

favour of yesterday's amendment to request an extension, it may be a case of

'too little, too late' for the Brexiteers. 

- With momentum now shifting in favour of the Remainders, some of those

Remain-leaning MPs that previously voted in favour of May's deal, may now feel

emboldened to push for the extension instead.

- Gilts trade marginally softer today with yields ~ <1bp on the day. Current

yield levels: 2-year 0.770%, 5-year 0.955%, 10-year 1.230%, 30-year 1.731%. The

very long-end of the curve has flattened slightly with 2s30s narrowing ~2bp on

the day.

- The Jun-19 gilt future trades at 126.64 at the bottom of the day's range.

- Short sterling futures are flat in broadly flat in whites/reds and up 0.5

ticks in greens/blues.