EGB/Gilts: After moving higher.........>

BOND SUMMARY: EGB/Gilts: After moving higher through most of the morning

session, gilts have reversed their gains on the news that Labour have announced

they will back a General Election in December - regardless of the date. In our

view this makes December 12 as the most likely date for an election but we still

do not think that the government will attempt to force through the Withdrawal

Agreement Bill (WAB) ahead of this. The result of the election bill votes are

expected some time after 6:30GMT. Ladbrokes odds see a 51% chance of a Tory

majority and 45% chance of a hung parliament.

- At the time of writing 10y gilt yields were at their highs of the day at

0.724% with the probability of a no deal Brexit pretty much at zero in the

betting markets.

- EGBs are still higher on the day, although the news of a UK election has

driven Bunds from their highs of the day. Peripheral spreads are little changed

on the day.

- Gilt futures are down -0.03 today at 131.73 with Bund futures up 0.20 at

170.90, BTP futures up 0.14 at 143.85 and OAT futures up 0.28 at 167.63.