Gilts are starting the week on the.....>

GILT SUMMARY: Gilts are starting the week on the back foot with the yield curve

marginally steeper as the long-end underperforms compared to the short-end.

10-yr Gilt yield is 1bp higher at 1.255%.

- In an BBC interview Prime Minister Theresa May appeared more confident and

confirmed that there would be a cabinet reshuffle following the resignation of

her Deputy Damian Green at the end of last year. It is believed though that

Boris Johnson, Phillip Hammond and David Davis will all be keeping their roles

as Foreign Secretary, Chancellor and Brexit Secretary respectively. While the

Telegraph reports that May is to appoint a 'Brexit No Deal' minister.

- There is also further evidence of a slow down in consumer spending with latest

figures from VISA showing a 1% fall in December, the first drop in Dec since

2012 and led to a -0.3% fall in 2017, also the first since 2012. While a survey

of CFOs by Deloitte shows that companies see increased risks from Brexit and are

focused on cost control.

- Breakevens are steady at the moment while 2-yr swap spreads continues to see

wild swings and is 2bp wider at 31.1bps.