###The 10-yr/30-yr Gilt yield spread broke....>

GILTS: ###The 10-yr/30-yr Gilt yield spread broke above 60bps earlier Monday,

the first time since Sep 19 after widening over 6bps following Bank of England

dovish rate hike on Thursday.

- Now that the BoE monetary policy decision is out of the way, attention is

turning back to the Brexit negotiations and the likely hood of talks moving onto

a future trade deal by the end of the year or in Q1 2018. Carney over the

weekend said that Brexit is holding back UK growth as uncertainty is weighing on

business. Carney's ongoing comments on Brexit would suggest that if negotiations

went well it may prompt a rethink on the current rate path direction.

- POV: There appears to be some behind the scenes talks between the key leaders

of the UK, EU, Germany and France, with the latest article from the Sunday Times

saying that UK signals it is willing to pay Stg53bln leads to EU negotiators to

start outlining a future trade deal. If the talks come to fruition and come the

end of the year talks move onto a future trade deal and the atmosphere improves

between the 2 negotiating teams, then market could start pricing in a higher

path of interest rates, leading to 10s/30s to flatten again.