Gilts are trading sharply higher.......>

GILT SUMMARY: Gilts are trading sharply higher heading into NY open, led by the

10-year part of the yield curve, as there is fresh doubt on there being some

form of agreement on the Northern Ireland/Ireland border issue before PM May and

EU Juncker meeting on Monday. Even stronger than expected UK manufacturing PMI

did not dent rally in Gilts.

- 2-yr Gilt yield is -2.7bp at 0.495%, 5-yr -4.1bp at 0.767%, 10-yr -4.8bp at

1.281% and 30-yr -3.8bp at 1.838% according to Tradeweb.

- The UK Committee for Exiting the EU have said that it is not possible to see

how the border issue in Ireland can be resolved after Brexit, casting doubt that

a way forward could be found ahead of crucial EU leaders Summit in 2-weeks time.

While Ireland are asking the UK to agree "wording" to avoid a hard border.

- UK manufacturing PMI for Nov increased to 58.2, highest level in 4-yrs from an

upwardly revised 56.6 in Oct, beating consensus of a small rise to 56.5.

-  UK Breakevens have continued their tightening move as linkers lag rally in

nominal Gilts. 5-yr is 0.5bp tighter at 2.9%. Swaps spreads are wider by around

1.5bps with the exception of the 30-yr which is 0.5bp tighter.