The Conservative party conference is...>

GILT SUMMARY: The Conservative party conference is in full swing, although

little of substance has hit the airwaves this morning. PM Theresa May is

expected to speak around midday.

- The September Services PMI came in lightly lower than expected at 53.9 vs 54.0

survey, while the Composite reading was 54.1 vs 53.9 

- Gilts have rallied and the curve has flattened.

- The benchmark 2-year gilt trades at 0.799% down from 0.822% and the 10-year

trades at 1.537% down from 1.5596%.

- The 2s10s spread has narrowed to 73.1bps from 73.8bps while the 2s30s has been

relatively steady between 109.3/109.6.

- The Dec Gilt future has ticked up to 121.33 from 121.09

- Inflation breakevens have inched lower, with the 5-year benchmark trading at

3.224% down from 3.243.

- Short sterling futures are flat to 1.0 ticks higher.