Gilts extended gains shortly after.....>

GILT SUMMARY: Gilts extended gains shortly after 1300BST with little seen to

trigger the move, however, Italy BTPs reversed gains and market traded with a

mild risk-off feel as traders worried over rising risk in emerging markets,

especially Argentina.

- The move was faded a little later as the it looked over-done although Gilts

remained underpinned by uncertainty on Brexit & extension to Carney as BoE Govn.

- 2-yr yield is unch at 0.734%, 5-yr -1.6bp at 1.026%, 10-yr -2.3bp at 1.41%,

30-yr -1.1bp at 1.764% & 50-yr -0.6bp at 1.627% according to Tradeweb

- Earlier, Dec Gilt future reversed opening losses in wake of soft Italy, French

and German manufacturing PMIs and then extended gains following weaker than

expected UK manufacturing PMI which hit a 25-month low due to drop in business

optimism and slow down in both output and new orders growth.

- Short Sterling futures have edged higher with Jun19 to Jun21 contracts rising

between 3 to 4 ticks. There was decent 2-way flow in Sep8 & Dec9 contracts

- Looking ahead UK construction PMI released Tuesday, while BoE Carney, Haldane,

Saunders, Tenreyro testify in front of Treasury Select Committee from 1315BST