Gilts look set to end Monday sharply...>

GILT SUMMARY: Gilts look set to end Monday sharply higher and close to session

highs led by the 10-year part of the curve as the shine comes off the

breakthrough seen in Brexit negotiations on Friday.

- There was no underlying catalyst for the change in evaluation of the Brexit

breakthrough, however markets took note of the disagreement over whether the

agreement was legally binding following comments over the weekend from Brexit

Secretary David Davis. Davis also said that the exit payment is contingent on

reaching a free trade agreement. There was further confusion when newswires

reported an EU source saying that the Brexit report is not legally binding and

is a deal between "gentlemen".

- 2-yr Gilt yield is currently at -3.6bp at 0.469%, 5-yr -5.8bp at 0.715%, 10-yr

-7.4bp at 1.204% and 30-yr -6.0bp at 1.786%.

- Short sterling strip has bull flattened today as markets pare back chances of

further interest rate hikes by the BoE. While swap spreads are wider across the

board with 2-yr and 10-yr 3.4bp and 2.2bp wider respectively. Breakevens on the

other hand are tighter led by a 2.5bp narrowing in 30-yr