Gilt futures have followed the lead....>

GILT SUMMARY: Gilt futures have followed the lead of Bunds by moving higher

through the morning session, marking new highs for the week.

- The main story this morning has been the report in The Times which has

suggested that Boris Johnson will look to hold a snap election, potentially

before the end of the year. The story says that Johnson's camp are looking to

take advantage of perceived weaknesses in the Labour party. They are said to

believe that Labour are weakened by the anti-Semitism issue, Brexit and concerns

with Corbyn's leadership of both issues. The article goes on to say that the

Tories fear Corbyn may be toppled from the Labour party and it would be easier

to beat Labour with Corbyn as leader.

- It is linker roll day today as UKTI 2.50% Jul-24 drops out of the linker

index.

- UK inflation data were in line with expectations while London house prices

continued their descent, having now fallen 6.4% from their peak.

- Gilt futures are up 0.44 today at 131.00 with 10y yields down -4.1bp at 0.779%

and 2y yields down -3.1bp at 0.544%.