Gilts have squeezed higher,............>

GILT SUMMARY: Gilts have squeezed higher, reversing earlier light losses, albeit

in very light volumes as markets digest latest political comments on Brexit.

yield curve has pretty much shifted lower by around 1.5bps.

- 2-yr Gilt yield is -1.2bp at 0.737%, 5-yr -1.5bp at 1.043%, 10-yr -1.5bp at

1.313%, 30-yr -1.4bp at 1.756% & 50-yr -1.5bp at 1.612% according to Tradeweb.

- International Trade Secretary Liam Fox said that the chance of a no-deal

Brexit was 60-40 as he complained about the the "intransigence" of the European

Commission. While the FT reports that the EU might "soften its Irish back stop

power" in order to avoid a no-deal Brexit.

- Citi have said that they are "mildly bearish" gilts following Thursday's BOE

meeting and stick with their 10s/20s flatteners, while TD say they are short the

belly of 5s/10s/30s fly.

- Turning to the markets there is little UK economic data released this week as

we hit the depths of summer, however BoE's McCafferty partakes in a radio phone

in on Tuesday and the DMO taps its 10-yr Gilt on Wednesday for Stg2.5bln.

- Short sterling futures are steady to 2 ticks higher, strip touch flatter.