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

GILT SUMMARY: Prime Minister Theresa May has warned of the risk of a long Brexit

extension - position supported by European Council President Donald Tusk.

- Speaker of the House John Bercow has blocked an amendment signed by 127

cross-party MPs that would have allowed parliament to reject a second

referendum.

- Both factors suggest that May's Withdrawal Agreement could yet be presented

for a third time in the hope of gaining DUP and ERG support.

- Having sold off early in the session, gilts have regained some lost ground.

Yields are ~2bp lower than the early morning highs. Current yield levels: 2-year

0.765%, 5-year 0.9499%, 10-year 1.224%, 30-year 1.738%. The very long-end of the

curve has flattened with the 2s30s spread narrowing to 96.4bp from 98.1bps.

- The Jun-19 gilt future trades at 126.72 near the middle of the day's range.

- The short sterling futures strip has steepened with whites down 0.5-1.0 ticks

and greens/blues down 3.0-3.5 ticks.