Having laid down the challenge to EU...>

GILT SUMMARY: Having laid down the challenge to EU capitals to remove the

contentious Irish backstop as a precondition for restarting formal Brexit

negotiations, Boris Johnson has today spoken with Leo Varadkar in which the

Irish taoiseach argued that the EU is united in opposing the removal of the

backstop.

- The Sep-19 gilt future trades at 132.6, up 13 ticks from Monday's close and 16

ticks off the day's high; L-H: 132.38-132.76.

- Gilts yields are 1-3bps lower on the day. Cash yields (Last / 1d chg / L..H):

2Y (0.4425% / -2.1bp / 0.438%...0.4508%); 5Y (0.4132% / -2.6bp /

0.4085%...0.4215%); 10Y (0.6391% / -1.4bp / 0.6322%...0.6443%); 30Y (1.3572% /

+1.8bp / 1.3498%...1.3618%).

- The curve has steepened: 2s10s (18.6bp / 0.3bp / 17.7bp..18.7bp); 2s30s

(90.5bp / 3.4bp / 88.1bp..90.5bp).

- Short sterling futures have broadly rallied with greens outperforming: W

(flat/+1.0 ticks); R (+ 1.0/1.5 ticks); G (+ 1.5/2.0 ticks); B (+ 1.0/1.5

ticks).