Gilts are trading modestly higher......>

GILT SUMMARY: Gilts are trading modestly higher ahead of NY open, with the

exception of the short-end of the curve which is little changed, however prices

are close to session lows, ignoring fall in sterling on the back of an agreement

on the Irish boarder issue being unlikely to be agreed this week.

- 2-yr Gilt yield is +0.2bp at 0.502%, 5-yr -1bp at 0.747%, 10-yr -2.5bp at

1.240% and 30-yr -2.2bp at 1.807%.

- With lack of UK and Eurozone data, markets have been on Brexit headline

watch,reacting to any comments being made by EU, UK, Ireland or DUP officials

and trying to gauge if there will likely be 'sufficient progress' in Brexit

talks for the EU to allow them to move onto the next stage.

- The latest from newswires is that PM May talked to DUP leader Foster on the

phone, but this only resulted in the comment that NI party dos not see a deal

this week. Spokesman for PM May though said that progress on moving to phase 2

has been made and the May is working towards Dec 14 Euro summit.

- Breakevens are little changed despite fall in Sterling, while swap spreads are

mixed with 2Y to 7Y slightly tighter while 10Y and above are wider.