Providing a modicum of support to......>

GILT SUMMARY: Providing a modicum of support to the beleaguered PM, ERG chief

and leading eurosceptic MP Jacob Rees-Mogg has indicated that May's deal is

preferable to not leaving at all. 

- However, the prime minister's rift with the DUP appears to have worsened in

recent days. Getting the ERG on board ahead of a third meaningful vote would be

difficult without DUP backing.   

- Further reiterating May's sentiment on indicative voting, Health Secretary

Matt Hancock has hinted that the government could ignore a proposal with

majority backing if it conflicted with the Conservative mandate.

- Gilt yields have steadily drifted higher through the morning and are now 2-3bp

higher on the day. Current yield levels: 2-year 0.655%, 5-year 0.785%, 10-year

1.0008%, 30-year 1.499%.

- The Jun-19 gilt future trades at 129.25 near the lows of the day.

- Short sterling futures are 2.0-3.5 ticks lower with slight underperforming in

reds/greens.