The Gilt market is struggling to.......>

GILT SUMMARY: The Gilt market is struggling to generate much direction on Monday

as the summer vacations are taking their toll on volumes.

- The 10Y Gilt yield is currently almost unchanged at 1.175% and neither

breakevens nor real yields are demonstrating independence.

- The only data were house prices from the Halifax that showed a 0.4%M/M rise in

July, recovering from a 0.9% monthly decline in the prior month. The numbers

were close to consensus.

- Over the weekend, the Telegraph newspaper reported that the UK government was

prepared to pay a E40bln Brexit divorce bill if the EU is prepared to talk

trade. The UK government denied this report.

- There was a brief strengthening of the euro, which included a pop higher to

0.905 against GBP but there was limited overspill into Gilts.

- The market is preparing for a smallish sale of index-linked 2026 Gilts

tomorrow but there really is little in the way of drivers today. In the US

Bullard and Kashkari are due to speak later and are the first to speak since the

strong payroll report.