Gilts are trading steady to slightly...>

GILT SUMMARY: Gilts are trading steady to slightly higher, curve flatter, having

reversed earlier losses, supported by rise in domestic political risk as Labour

leader Jeremy Corbyn looks to remain in some sort on Customs Union, (advocating

a "soft Brexit") and putting pressure on PM May and her Tory government.

- 2-yr Gilt yield is -0.2bp aty 0.693%, 5-yr -0.5bp at 1.018%, 10-yr -0.5bp at

1.516%, 30-yr -1.1bp at 1.913% and 50-yr -1.1bp at 1.695%

- Earlier, Gilts opened on the soft side and extended losses, led by the short

end of the yield curve, weighed by hawkish comments from BoE Dave Ramsden over

the weekend -- rates need to rise quicker than originally thought.

- Gilts bounced off session low despite upbeat mortgage approval data and then

hit session highs as Jeremy Corbyn said that they would seek a new comprehensive

customs union with the EU after Brexit and urges MPs from all parties to join

Labour in its plan.

- 5-yr and 10-yr UK breakevens are  around 1bp tighter while swap spreads are

little changed with the exception of 2-yr which is 1.3bp wider at 38.7bps, fresh

year-to-date high.