PM Theresa May has requested an........>

GILT SUMMARY: PM Theresa May has requested an Article 50 extension to June 30,

which if reached would require the UK to take part in European parliament

elections. European Council President Donald Tusk concomitantly floated the idea

of a year-long extension. Any extension would require unanimous consent of the

EU27, with leaders due to meet on Wednesday. 

- While the first day of discussions between May's cabinet and the Labour leader

were said to be 'constructive', yesterday's meeting is reported to have been

more difficult.

- Gilts have sold off this morning and the curve has steepened on the back of

the long-end underperforming. Yields are 3-5bp higher on the day. Current yield

levels: 2-year 0.719%, 5-year 0.865%, 10-year 1.124%, 30-year 1.677%. The 2s30s

spread has widened to 94.9bp from 92.5bp.

- The Jun-19 gilt future trades at 127.90 near the bottom of the day's range.

- Short sterling futures are 0.5-5.0 ticks lower with greens/blues

underperforming.