Gilts look to close steady to..........>

GILT SUMMARY: Gilts look to close steady to modestly higher Monday having

withstood a mini sell-off this afternoon on continued Italian political

concerns. Curve wise, the ultra long-end has parred earlier gains while the

short-end has squeezed higher.

- 2-yr Gilt yield is -1.3bp at 0.806%, 5-yr -1.5bp at 1.164%, 10-yr -1.9bp at

1.481%, 30-yr -0.8bp at 1.896% and 50-yr -0.6bp at 1.691% according to TradeWeb

- With a dearth of UK and European data today attention has been firmly on the

political situation in Italy and to a little extent the UK as well. In Italy

concern is growing regarding the populist government proposal of mini-BOTS and

the announcement of nominee for post of Prime Minister.

- While in the UK, although rather muted for now, there appears to be more

whispers of the potential for an Autumn election.

- Blue short sterling contracts have reversed earlier gains while white and reds

have ticked higher and in turn bull steepened the curve. Breakevens remain

little changed while swap spreads remain a touch wider with exception of the

2-yr which is 1.6bp tighter.