Gilts are trading mixed with the.......>

GILT SUMMARY: Gilts are trading mixed with the 5-yr to 10-yr sector leading the

underperformance, impacted by large sell-off in both US Treasuries and German

Bunds, while the ultra-long-and to some extent the very short-end remains

anchored for now.

- 2-yr Gilt yield is +0.5bp at 0.632%, 5-yr +2.0% at 0.993%, 10-yr +2.0bp at

1.464%, 30-yr -0.2bp at 1.897% and 50-yr -0.3bp at 1.682%.

- Gilts have fallen less than both US Treasuries and German Bunds though, seen

underpinned by heightened domestic political concerns which has also weighed on

Sterling.

- Cracks within the Tory seam to be getting wider on Brexit and there are

questions over Theresa May leadership once again. While UK is seeking the

ability to vet new EU laws during transitional phase which is set to clash with

the EU and possibly delay any agreement. While the EU withdrawal (Brexit) Bill

will be discussed in the House of Lords for 2-days starting on Tuesday which

could add more pressure.

- 5-yr and 10-yr beakevens are circa 2.5bp wider while swap spreads are mixed.