Gilts have slowly grinded lower this...>

GILT SUMMARY: Gilts have slowly grinded lower this morning, once again with

little seen to precipitate the market action apart from weekend comments from

French President Macron on possible future trade deal the UK could have with the

EU after Brexit. The curve has pivoted around the 10-year sector.

- 2-yr Gilt yield is +0.8bp at 0.573%, 5-yr +1.5bp at 0.871%, 10-yr +2.3bp at

1.361%, 30-yr +1.7bp at 1.862 and 50-yr +1.4bp at 1.641%.

- Macron said in an interview on Sunday that it would be possible for the UK to

get a bespoke trade deal, but only if they accept certain "preconditions". The

French president said that while a special solution could be secured, full

access to the single market without accepting its rules was "not feasible".

- Attention is also on US partial government shutdown and how long it could

possibly last with the Senate meeting later today to try and resolve the issues.

- Swap spreads are modestly wider, led by the ultra long-end of the curve, while

breakeven are steady to higher with 10-yr and 30-yr 1bp and 1.5bp wider

respectively.