The EU's chief Brexit negotiator,......>

GILT SUMMARY: The EU's chief Brexit negotiator, Michel Barnier, has stated that

an extension to article 50 would require a stable majority in Westminster on the

Brexit outcome. Given the deep divisions in the House of Commons over competing

Brexit options, securing consensus still appears to be an intractable problem.

- Gilts have been selling off from the open with yields up 2-3bps from

yesterday's close. Current yield levels: 2-year 0.818%, 10-year 1.350%, 30-year

1.843%.

- The very long-end of the curve has flattened as the 30-year has lagged the

broader selloff. The 2s30s spread has narrowed to 101.3bps from 104.8bps.

- The Mar-19 gilt future trades at 122.45 near the lows of the day.

- Inflation breakevens have made a marginal push lower.

- The short sterling futures strip is down 0.5-2.0 ticks with reds/greens

underperforming.