Gilts rallied during London morning....>

GILT SUMMARY: Gilts rallied during London morning session, ignoring the impact

of the surprise UK rating downgrade on Friday. They were supported by a strong

Bund market that saw stop losses firing off rapidly in the German election

reaction. 

- However the happy feeling in the Gilt market and around 3 hours into the

session, the Gilt future had peaked and started to descend with few upward bumps

until North Korean foreign minister comments that Trump's weekend comments were

"clearly a declaration of war" and that all options are on the table for the

North Korean leadership. 2-yr Gilt yield is -0.3bp at 0.441%, 5-yr -1.2bp at

0.758%, 10-yr -1.6bp at 1.4% and 30-yr -1.6bp at 1.91% according to Tradeweb. 

- Brexit talks resume in Brussels tomorrow, but expectations are low, despite

May's speech in Italy last week.

- UK 10Y breakevens are 1.0bp higher, while swaps spread are little changed.