Gilts have bounced off opening lows....>

GILT SUMMARY: Gilts have bounced off opening lows but still remain in negative

territory as markets build up some hope of the deadlock in Brexit negotiations

are unhinged slightly as PM May and Brexit secretary Davies travel to Brussels

to meet Juncker and Barnier.

- Markets are also seen positioning ahead of key inflation data and comments

from BoE Governor Mark Carney at Treasury select committee on Tuesday, and

latest UK labour report on Wednesday.

- 2-yr Gilt yield last +1.3bp at 0.481%, 5-yr +1.5bp at 0.822%, 10-yr +1.4bp at

1.380% and 30-yr +1.0bp at 1.932% according to Tradeweb.

- Gilts opened sharply lower with the 10-yr Gilt rising by over 4bp at one

stage, weighed by overnight move lower in US Treasuries and as markets had first

chance to react to BoE Carney comments late Friday -- "we are running out of

that spare capacity and that tolerance for having inflation over target", and

news that May and Davies were travelling to Brussels.

- Majority of sap spreads are tighter with the 15-yr seen leading the way at

-1.5bp, while 10-yr & 30-yr breakevens are 0.6bp wider.