The sharp rally in gilts following.....>

GILT SUMMARY: The sharp rally in gilts following the DUP chief whip's comments

indicating the likelihood of a no-deal Brexit has subsequently reversed. The

sell off from 1140BST coincides with comments from Brexit Secretary Dominic Raab

indicating a more benign outcome at this morning's cabinet meeting. Cable

similarly rallied on the newsflow.  

- The 2-year gilt trades at a yield of 0.800% off a morning low of 0.787%, while

the 10-year yield has pushed back up to 1.510% from 1.491%.

- The curve has steepened since the open with the 2s10s spread trading up to

70.2bps from a low of 69.2bps.

- The Dec Gilt future trades at 121.68, coming off a high of 121.85.

- Longer-term inflation breakevens have ticked higher with the 10-year benchmark

trading up to 3.125% from 3.103%.

- The short sterling futures strip is 1.0-2.0 ticks higher in whites-greens. We

observed little in the way of short sterling option flow this morning.

- The data calendar is light until Friday when Q3 GDP, industrial production and

international trade data will be published