Gilts remain under water having........>

GILT SUMMARY: Gilts remain under water having opened lower on back of weak JGBs

and US Treasuries overnight, ignoring latest Brexit concerns and slight weakness

seen in UK manufacturing PMI data. 10-yr sector continues to lead the move lower

and in-turn pivoting the yield curve.

- UK papers this morning were full of articles on Brexit, with PM May said to

cut short her holiday to meet with French president Macron. While the FT

reported that the EU "is willing to fudge crucial Brexit negotiations" in hope

of securing a withdrawal agreement in October. 

- On a economic front, the Times reports that Chancellor Hammond is looking into

another round of spending cuts and shop price deflation eased in July to -0.3%

from -0.5% according to latest BRC index. While UK manufacturing PMI hit 3-month

low of 54.0 in July, but these had little impact on Gilts.

- Short sterling strip is steeper with blue contracts 3 to 4 ticks lower as

whites are unchanged to 1 tick lower.