/GILT SUMMARY: The UK Conservative.............>

EGBS: /GILT SUMMARY: The UK Conservative leadership election race gets underway

today. MPs intending to run will need to formally declare their candidacy, with

the final list expected to be announced at 1730BST today. Multiple rounds of

voting will be required to whittle the list down to two candidates, who will

then go before the party membership in July.

- Gilts have started the session on a weaker footing with yields 3-5bp higher

from Friday's close. Current yield levels: 2-year 0.561%, 5-year 0.614%, 10-year

0.849%, 30-year 1.425%.

- EGBs have similarly sold off. The Bund curve has bear steepened with 2s30s up

4bp on the day.

- French OATs have mirrored bunds with the longer-end underperforming. 

- Italian BTPs are leading the charge with yields 7-9bps higher. The 30-year

benchmark is lagging the broader sell-off. Further stoking concern about a

re-escalation of the budget conflict with Brussels, Deputy PM Di Maio has stated

that the EU must allow Italy to cut taxes to spur the economy.