Gilts extended losses in London........>

GILT SUMMARY: Gilts extended losses in London afternoon trade weighed by upbeat

comments from Michel Barnier on Brexit talks and fall in US treasuries. The

10-yr sector has lead the rest of the yield curve higher with 2s/10s 3.8bp wider

and 10s/30s 1.8bp tighter.

- 2-yr Gilt yield is +1.6bp at 0.745%, 5-yr +3.5bp at 0.998%, 10-yr +5.3bp at

1.239%, 30-yr +3.5bp at 1.695% & 50-yr +3.0bp at 1.558% according to Tradeweb.

- Gilts opening higher but lost ground quickly to trade around unchanged levels

following slightly disappointing UK borrowing numbers. 

- Comments from BoE Tenreyro in an Evening Standard interview that pointed

towards the possibility that she may vote for a rate hike in August as she

thought the soft Q1 data was weather related then weighed on Gilts.

- However the major move in Gilts happened in second half of London afternoon

trade when Barnier said that they could amend/improve Irish border backstop and

that he sees withdrawal agreement deal in October or November. Sell-off in US

Tsys/Bunds also weighed on Gilts:

- Sstg futures are 2 to 5 ticks lower led by fall in blue contracts