Following comments from cabinet........>

GILT SUMMARY: Following comments from cabinet minister Michael Gove at the

weekend indicating that the government is working under the assumption of a

no-deal Brexit, the two-time Tory leadership candidate is set to lead the first

cabinet meeting to discuss progress towards leaving the EU by October 31. The

cabinet is set to meet on a daily basis to this effect. 

- Meanwhile, Foreign Secretary Dominic Raab has refused to rule out the

possibility of the government introducing direct rule in Northern Ireland as

part of no-deal preparations. 

- The Sep-19 gilt future trades at 132.42, up 34 ticks from Friday's close and 3

ticks off the day's high; L-H: 132.21-132.45.

- Gilts have rallied with yields 1-4bps lower on the day. Cash yields (Last / 1d

chg / L..H): 2Y (0.4501% / -3.1bp / 0.4497%...0.4641%); 5Y (0.4371% / -3.5bp /

0.4363%...0.4537%); 10Y (0.653% / -3.3bp / 0.6521%...0.6697%); 30Y (1.3339% /

-1.2bp / 1.3331%...1.3455%).

- The short sterling futures strip has flattened: W (+ 1.0/2.5 ticks); R (+

3.0/3.5 ticks); G (+ 3.5/4.0 ticks); B (+ 3.5/4.0 ticks).