Gilts are weaker to open Tuesday,......>

GILT SUMMARY: Gilts are weaker to open Tuesday, with risk appetite continuing to

rise on Monday's comments by EU`s Barnier that a Brexit deal is 'realistic' in

6-8 weeks.

- Gilt Dec18 future is off 24 ticks at 121.74, just off low of 121.68.

- The curve is bear steepening, with 2-Yr yields up 1.9bps at 0.786%, 5-Yr up

2.1bps at 1.074%, 10-Yr up 2.5bps at 1.494%, and 30-Yr up 2bps at 1.848%.

- The 30-Yr yield is the highest since June 12, with supply likely weighing: the

Debt Management Office will sell a new 1.75% Jan-49 Gilt for Stg2.5bln on

Tuesday, results expected around 1030BST.

- Short Sterling is weaker across the strip, with Red through Blue contracts off

2.0-3.0 ticks.

- UK July labour report out at 0930BST. Markets looking for any further

confirmation of strong activity after Monday`s higher-than-expected GDP reading.

Unemployment rate expected unchanged at 4.0%; earnings ex-bonuses expected to

pick up from 2.7% in June to 2.8% in July on a 3M y/y basis.