/EGB & GILTs: A government.............>

BOND SUMMARY: /EGB & GILTs: A government spokesperson has confirmed that PM

Theresa May will seek a short extension to Article 50. However, EU Brexit

negotiator Michel Barnier has warned that Westminster will need to provide the

EU with a credible reason for a delay.

- Gilts have rallied through the morning with the curve flattening on the back

of long-end outperforming. Current yield levels: 2-year 0.778%, 5-year 0.917%,

10-year 1.175%, 30-year 1.656%. The 2s30s spread trades at 90.5bp down from

92.4bp.

- Bunds trade close to flat on the day, with slight underperformance in the 3-

and 5-year benchmarks. 

- French OATS are a touch weaker today with yields <1.2bp lower on the day.  

- Italian BTPs have sold off through the morning, with the longer-end leading

the charge. Yields are 2-5bp higher, with the 10-year underperforming.

- Euribor futures are broadly flat-1.0 ticks lower. Short sterling futures are

1.0-2.0 ticks higher with marginal outperformance in greens/blues.