June Gilt future hit session low of....>

GILT SUMMARY: June Gilt future hit session low of 121.14 at 1230GMT and has been

recovery lost ground ever since supported by the Irish boarder issue remaining

unresolved in Brexit talks, sharp sell-off in US/European stocks, fall in oil

and an ECB that is worried by steepness of Euro rate path.

- Curve wise, the 5-10-yr part of the yield curve has come under the most

pressure, while ultra long-end looks set to close modestly higher.

- 2-yr Gilt yield is +1.6bp at 0.826%, 5-yr +2.3bp at 1.159%, 10-yr +2.1bp at

1.456%, 30-yr -0.4bp at 1.796% and 50-yr -0.6bp at 1.577% according to Tradeweb.

- Gilts were already trading lower when newswires flashed confirmation that the

UK and EU have agreed a broad Brexit transition deal that included citizen

rights and financial settlement, which forced them to session lows. On the

contentious issue of the Irish boarder, some progress had been made but a lot of

work was still needed. Both Davis and Barnier said that a "backstop" would be

required to sign-off the withdrawal deal but had not agreed on the wording.

- 5-yr and 10-yr breakevens have tightened by 2.2bp, while swap spreads are

little changed. Attention now turns to UK inflation data tomorrow.