In a sign that MPs are starting to.....>

GILT SUMMARY: In a sign that MPs are starting to position for alternative

scenarios in the event of Prime Minister Theresa May's withdrawal agreement

being voted down in parliament, Chancellor of the Exchequer Philip Hammond has

stated that remaining in the EU would be a better outcome for the economy. Other

MPs have started to talk up the possibility of a Norway-style deal in recent

days, while longstanding calls for a second referendum continue to reverberate

among the fervent Remainers.

- The gilt curve has steepened as a result of the short-end outperforming. The

benchmark 2-year yield trades at 0.742% down from a morning high of 0.764%,

while the 10-year yield has pulled back from the morning low at 1.355% and

currently trades at 1.371%.

- The 2s10s spread has traded up to 61.9bps from a low of 60.4bps. On the back

of the very long-end selling off, the 2s30s spread has steepened by 7bps.

- The Dec gilt future trades at 123.22 in the middle of the day's range.

- There has been limited movement in inflation breakevens.

- The short sterling futures strip is broadly flat to 1.0 ticks higher.