One of the most prominent..............>

GILT SUMMARY: One of the most prominent anti-Brexit MPs, Dominic Grieve, has

warned that it is more likely that the government will fall than the new PM

pursuing a no-deal Brexit.

- Bloomberg reports that at a meeting of Brexit negotiators last week, European

officials were bracing for a more hostile UK PM and were considering possible

sweeteners to prevent a disorderly no-deal Brexit.

- The tightness of the UK labour market has seen job growth slow (28k 3m/3m in

June vs 45k survey) and has lifted wages (AWE 3.4% Y/Y vs 3.1% survey).

- The Sep-19 gilt future trades at 130.94, up 10 ticks from Monday's close and

13 ticks off the day's high; L-H: 130.71-131.07.

- Gilts have rallied with yields 1-2bps lower on the day. Cash yields (Last / 1d

chg / L..H): 2Y (0.5506% / -1.2bp / 0.5453%...0.5538%); 5Y (0.5633% / -2bp /

0.5572%...0.5666%); 10Y (0.7832% / -1.6bp / 0.7751%...0.786%); 30Y (1.396% /

-1.3bp / 1.3897%...1.3993%).

- Short sterling futures have broadly rallied with reds outperforming: W (+

0.5/1.5 ticks); R (+ 1.5 tick); G (+ 1.0/1.5 ticks); B (+ 1.0 tick)