Gilts have opened sharply higher, but.........>

GILTS: Gilts have opened sharply higher, but probably not as high as some had

thought, as they catch up from extended bank holiday weekend. Curve is slightly

flatter as ultra long-end outperforms the short-end. 10-yr Gilt yield is 6bp

lower at 1.264%.

- Political concerns are not confined to just Italy with confidence vote in

Spain's government due Friday and continued worries over the UK government and

the mounting issues on Brexit.

- There is still no progress seen on the Irish border issue, while arguments

over security/defence rise up a notch and the Jun EU summit is fast approaching.

- Short Sterling strip is flatter with green and blue contracts 6 to 7 ticks

higher compared to a steady to 3 tick move in white contracts.

- No Data from the UK today, so attention likely to remain on European and

Domestic politics.