Gilts have rallied Monday morning......>

GILT SUMMARY: Gilts have rallied Monday morning led by the 10-yr part of the

yield curve as the shine comes off Friday's Brexit breakthrough agreement

following weekend political comments.

- 2-yr Gilt yield is -4.1bp at 0.462%, 5-yr -4.9bp at 0.724%, 10-yr -5.7bp at

1.222% and 30-yr -5.2bp at 1.796% according to Tradeweb.

- Gilts opened modestly higher and then quickly extended gains as Brexit

Secretary David Davis was interpreted saying in a televised interview on Sunday

that the Brexit agreement reached on Friday was not binding and that the exit

payment is contingent on reaching a free trade agreement. This brought short

rebuttal from Ireland saying the deal is binding and would hold UK "to account"

on it. The EU then said the Brexit report is not legally binding ans is a deal

between "gentlemen". 

- There was a large 1.5k Gilt future block which as first appeared to be a buy,

but could of been a sale and reason for temporary halt in the Gilt rally

- Swaps spreads are wider led by 4bp widening in 2-yr, while breakevens are

modestly tighter led by the 1.3bp fall in 30-yr spread.