Despite cabinet ministers reportedly...>

GILT SUMMARY: Despite cabinet ministers reportedly indicating that Brexit could

be delayed beyond the March 29 deadline, PM Theresa May was quite to dispel the

rumour. 

- The initial suggestion of delaying Brexit centres on the limited time

available to pass the backlog of at least 6 essential bills related to the

withdrawal process through parliament. However, as we have noted, it is not the

government's gift to extend Article 50.

- Gilts initially sold off on the announcement, but then pared losses before

resuming the sell-off. Yields are broadly 3-4bps higher on the day and the curve

is a touch flatter. The 2s10s spread has narrowed to 48.5bps from 50.9bps. 

- The Mar 19 gilt future trades at 122.81, near the lows of the day. 

- Inflation breakevens have inched higher with the 5-year benchmark trading at

3.232% up from a low of 3.210%.

- Short sterling futures are broadly 0.5-1.0 ticks higher.