It has been a choppy day for the.......>

GILT SUMMARY: It has been a choppy day for the Gilts today. There was an initial

drop in the 10Y Dec17 future contract in the morning. The move appeared to be on

the back of reports that PM May was willing to increase her offer to the EU in

terms of the divorce bill and that cabinet ministers had indicated that they

would support such a move.

- In the afternoon the 10Y Gilt contract grinded up slowly and the pushed to

intra-day highs of 124.94. The move to the highs seems to have been on reports

that Chancellor Hammond had authorised an extension of the term funding scheme.

- In terms of Brexit news The Telegraph reported the EU's chief Brexit

negotiator Michel Barnier said that "the European Union will reject any future

free trade agreement with Britain if it slashes EU regulation and red tape after

Brexit".   

- 2-yr gilt yield is -0.2bp at 0.486%, 5-yr -0.9bp at 0.765%, 10-yr -1.4bp at

1.290% and 30-yr -2.0bp at 1.841% according to Tradeweb

- UK swap spreads are mixed with 2Y 0.8bp wider and breakevens are also mixed

with 30Y 1.2bp wider.