Gilts opened lower, however,...........>

GILT SUMMARY: Gilts opened lower, however, immediately reversed losses and

currently trade slightly higher with yield curve modestly bull steepening,

underpinned by growing domestic political concerns, possible delays in agreeing

a Brexit transitional deal and downside surprise to Saxony flash CPI. 10-yr Gilt

yield is 0.5bp lower at 1.449%.

- A leaked government report shows the UK will be worse off under three

different Brexit scenarios (comprehensive free trade deal, single market access

or no deal) and is seen as an embarrassment for the government. The Telegraph

reports Theresa May will "go into battle" with the EU over free movement of

people and accepting new EU laws. While The Times reports that there are rowing

calls for PM May to step down.

- Looking ahead BoE mortgage approvals and money supply data is released at

0930GMT, while BoE Carney appears in front of House of Lords Committee to answer

questions on growth, Brexit and CPI target.

- The front end of swap spreads have ticked lower, while further out they have

inched higher. Breakevens are little changed so far.