/EGBs/Gilts: Although UK PM Theresa....>

BOND SUMMARY: /EGBs/Gilts: Although UK PM Theresa May has proven remarkably

adept at clinging on to power in the face of repeated assaults on her leadership

from disgruntled MPs, it appears as though the end of the line is near. Vocal

eurosceptic MP Andrea Leadsom quit the cabinet yesterday evening over opposition

to May's new Brexit proposals and there is speculation that the 1922 executive

(representing Conservative backbenchers) has taken a vote on whether to change

party rules on electing a leader. Gilts have opened stronger this morning with

yields 2-3bp lower. Short sterling futures have got off to a strong start with

greens/blues up 4.0-5.0 ticks.

- Bunds have similarly firmed and the curve has flattened. Current yield levels:

2-year -0.3695%, 5-year -0.517%, 10-year -0.103%, 30-year 0.556%. 

- Spain will tap the market for E3.5-4.5bln this morning with the 0.25% Jul-24

Bono, the 1.45% Apr-29 Obli and the 1.85% Jul-35 Obli on offer. Spanish bonds

are trading mixed. The 2-year yield is up 2.4bps while the rest of benchmarks

trade close to unch.