Gilts recovered in the afternoon,......>

GILT SUMMARY: Gilts recovered in the afternoon, led by the 5-yr to 10-yr part of

the yield curve, underpinned by pessimistic comments on progress of Brexit talks

and concerns over passage of US tax bill. Real yields though remained weighed as

Sterling continued its rise vs US Dollar

- 2-yr Gilt yield is -0.4bp at 0.523%, 5-yr -2.2bp at 0.81%, 10-yr -2.1bp at

1.331% and 30-yr -1.4bp at 1.881% according to Tradeweb.

- Ireland's new deputy PM Coveney was reported to have said in the afternoon

that "significantly more clarity is need" on the border issue taking out some of

the optimism that has built up over the past 2 days that sufficient progress has

been made on Brexit talks.

- Gilt real yields have underperformed nominals with 5-yr seen weighed the most,

likely weighed by expectation inflation will faded as Sterling continues to

strengthen against US Dollar and Euro. 5-yr breakevens are 6bp tighter at 2.90%

(lowest since mid-Aug) and adds to 3.2bp tightening seen yesterday.

- Swap spreads are tighter with the exception of 2-yr which is 1bp wider, while

15yr and 30-yr are leading the way at 1.2bp tighter.