Gilts are trading significantly........>

GILT SUMMARY: Gilts are trading significantly lower led by the short-end,

in-turn bear flattening the yield curve as hopes of a Brexit deal edges closer.

- 2-yr Gilt yield is +6.5bp at 0.509%, 5-yr +5.6bp at 0.773%, 10-yr +5.3bp at

1.281% and 30-yr 5.4bp at 1.847% according to Tradeweb.

- Gilts opened sharply lower weighed by late Friday night approval of US tax

reform plan by the Senate and reports that a Brexit deal is 90% there was also

seen weighing.

- Markets were then stuck in lower range waiting for updates on Brexit talks,

especially on the Irish border issue which had not yet been agreed. Some of

these concerns crept into the FI markets and Mar Gilt future squeezed to fresh

session high following a block buy of 1.5k contracts at 124.35.

- Newswire headlines saying that EU's Chief negotiator Michal Barnier had told

"MEPs that a breakthrough is likely today" then sent Gilts crashing lower.

- PM May is scheduled to meet EU's Juncker and Tusk for lunch in Brussels today,

so all sides are trying to agree on a deal for EU leaders to consider next week.

- Swap spreads are tighter across the board while swap spreads are mixed