Gilts are opening modestly lower.......>

GILT SUMMARY: Gilts are opening modestly lower Monday, with the short-end of the

yield curve seen leading the underperformance, weighed by a Times article that

the ONS Unit Labour Costs released on Friday contained an error and is expected

to be raised sharply higher today when an official correction is announced.

- Growing confidence that PM May is likely to remain as Prime Minister as the

movement behind calling for her resignation fades over the weekend and cabinet

members continue to show support, may also be adding to downside pressure on

Gilts. 2-yr Gilt yield is +1.4bp, while 10-yr is +1.1bp according to Tradeweb.

- Little UK data or official speakers scheduled for today, however PM May is

expected to address parliament on Brexit as the fifth round of negotiations

start in Brussels. 

- It is the final round of talks before the EU leaders summit at the end of

October, but it is unlikely "sufficient progress" will be made on the 3 key

areas for the talks to move onto trade. There is some optimism that progress

cane be made on citizen rights, however, the Brexit bill remains a contentious

issue.