Gilts have opened marginally lower.....>

GILT SUMMARY: Gilts have opened marginally lower Thursday with no real progress

seen on the Irish border issue however, it was confirmed by Downing Street

officials that a crucial discussion in the Cabinet on the Brexit "end state"

will happen before Christmas. 10-yr gilt yield is 0.4bp higher at 1.234%.

- The cabinet meeting is seen as critical as it will need to decide on what type

of relationship the UK wants with the EU after Brexit with it boiling down to

either having a "high or low alignment" with EU rules. With the cabinet clearly

split, deciding on one or the other could lead to resignations or as a worse

case the toppling of PM May or even a collapse of the government.

- Sensing the perilous state of the UK government EU's Juncker was reported to

have said that he has given the UK up to the eve of EU leaders summit next

Thursday to agree on a way forward on the Irish border. Michel Barnier was

quoted as saying last night however, the UK had only 48 hours to come up with an

offer.

- Long-end is seen underperforming slightly, likely weighed by 30-yr Gilt

re-opening auction for Stg2.25bln.