PM Theresa May has headed to...........>

GILT SUMMARY: PM Theresa May has headed to Brussels to seek more time to get her

Brexit deal passed, although the EU appears to be insisting that their proposed

22 May cut off is non-negotiable. Anecdotally, May's public address last night

seems to have done more harm than good as furious MPs have lashed out at a

perceived haranguing by the PM. 

- Gilts have rallied sharply this morning with yields 4-6bp lower on the day.

Current yield levels: 2-year 0.697%, 5-year 0.848%, 10-year 1.101%, 30-year

1.577%. The curve has flattened on the back of long-end outperformance with

2s30s narrowing to 87.0bp from 89.6bp.

- The Jun-19 gilt future trades at 128.15 near the top of the day's range.

- Inflation breakevens have inched higher with the 5-year benchmark trading up

to 3.135% from a low of 3.089%.

- The short sterling futures strip has flattened with greens/blues up 5.0-5.5

ticks on the back of the Fed's dovish tilt and further political stress in

Westminster.