Gilts started the day on the front.....>

GILT SUMMARY: Gilts started the day on the front foot before paring their gains

and moving lower and have now gone full circle and are pretty much unchanged on

the day with 2y yields up 0.2bp at 0.760%, 10y yileds up 0.1bp at 1.199% and

gilt futures down 0.13 at 127.05.

- Brexit headlines continue to be the main driver for gilts. Indeed, putting

together the preview for the MNI BoE preview and summary of sell side view this

week is providing difficult; many sell side institutions have not published full

BoE previews and are instead pointing to unchanged guidance and the BoE

remaining in a holding pattern until Brexit is resolved. This merely shows how

little the market cares about what policy makers say about monetary policy until

Brexit is resolved.

- Another example of this could be seen this morning with some extremely good

employment data published, along with strong wage and unemployment data.

However, there was very little market reaction.

- Brexit remains the only game in town and today there have not been any Brexit

headlines big enough to move the market.