Prime Minister Theresa May has.........>

GILT SUMMARY: Prime Minister Theresa May has reiterated that the government is

not seeking to remain in the EU customs union (a key plank of Labour's approach

to Brexit negotiations) and has deflected accusations that she is running down

the clock while simultaneously asking MPs to hold their nerve.

- Although not an issue of immediate concern, May has stated that she is 'not

planning' to resign in the summer, which was not a particularly emphatic denial.

- Adding further fuel to the mix, the EU's chief Brexit negotiator Michel

Barnier has reiterated that the onus is on the UK to breach the impasse, while

BoE Governor Mark Carney has relayed his concerns about the impact of Brexit on

the recent soft GDP print.

- Gilts have been trading sideways for most of the day within a 2-3bp yield

range. Current yield levels: 2-year 0.725%, 10-year 1.184%, 30-year 1.692%. The

very long-end of the curve has steepened with 2s30s inching up to 95.9bps from

94.6bp.

- Short sterling futures are flat/0.5 ticks higher in whites and close to flat

in reds/greens/blues.