- Gilts have gradually moved higher....>

GILT SUMMARY: - Gilts have gradually moved higher throughout the day today and

outperformed Bunds and USTs.

- The most predictable political development of recent UK history has finally

been confirmed as Boris Johnson has won the Conservative members ballot and will

become the next Prime Minister. He is likely to name most of his cabinet later

this week but he has already named Mark Spencer as his Chief Whip.

- As expected, there has been no real reaction in the gilt market to news that

was already priced in.

- Elsewhere today, the BoE has continued to reinvest, today buying bonds at the

long-end with almost all of the purchases covering the two longest dated

conventional bonds in issue. Tomorrow it will buy medium-dated debt. The DMO

also issued Stg3.2bln of the 0.875% Oct-29.

- Gilt futures are up 0.23 today at 132.00 with 10y yields down -1.6bp at 0.690%

and 2y yields down -0.9bp at 0.478%.