Gilts have reversed morning losses,....>

GILT SUMMARY: Gilts have reversed morning losses, rallying on a lack of progress

on a Brexit deal at the Salzburg EU summit, as well as some Italian political

risk and a reversal in US Treasury yields.

- The Dec 18 Gilt future is up 15 ticks at 120.82, having traded in a range of

120.54-120.88 today.

- Gilt cash curve has bull flattened: The 2-Yr yield is down 0.5bps at 0.839%,

5-Yr is down 0.5bps at 1.185%, 10-Yr is down 1.5bps at 1.593% (coming off an

intraday high of 1.624% which was highest since February), and 30-Yr is down

2.3bps at 1.935%.

- Many headlines out of Salzburg today, but the status quo is essentially

unchanged: a UK/EU Brexit deal looks unlikely by the original October

`deadline`, with November now eyed.

- While Short Sterling is largely unchanged on the day, with short-dated

contracts down 1 tick and 2021/2022 contracts up 1.0 tick, it has been an

unusually high activity day for options trading.

- Friday sees UK Aug public sector net borrowing data at 0930BST.