Conservative party leadership..........>

GILT SUMMARY: Conservative party leadership frontrunner Boris Johnson has stated

that anybody serving in his cabinet would need to accept the possibility that

the UK may eventually opt for no-deal Brexit.

- Boris Johnson and Jeremy Hunt are due to take part in a debate on July 15,

with the former having the most to lose in the event of a poor performance.

- Meanwhile, Japan's foreign minister has warned the UK that Japanese companies

are likely to relocate in a no-deal scenario. 

- The Sep-19 gilt future trades at 130.37, down 18 ticks from Wednesday's close

and trading near best levels; L-H: 130.04-130.39.

- Gilts are a touch weaker with yields 0-1bps higher on the day. Cash yields

(Last / 1d chg / L..H): 2Y (0.5994% / -0.2bp / 0.5985%...0.6206%); 5Y (0.6248% /

+0.3bp / 0.624%...0.648%); 10Y (0.8328% / +0.3bp / 0.832%...0.8586%); 30Y

(1.4675% / +1.2bp / 1.4661%...1.4823%).

- The short sterling futures strip has steepened: W (broadly flat); R (- 0.5/1.0

ticks); G (- 1.0/1.5 ticks); B (- 1.5/2.5 ticks).