The stalemate over the Irish border....>

GILT SUMMARY: The stalemate over the Irish border problem has triggered fresh

rumours that pro-Brexit Conservatives are considering calling a vote of no

confidence in PM Theresa May. Gilts have been unperturbed and cable has rallied,

suggesting that the market does not view the threat as credible, or that a

no-confidence motion would not muster sufficient votes.

- Gilts have traded sideways during the morning session. The benchmark 2-year

gilt yield has traded within a 0.802/0.824% range while the 10-year has held

within a 1.602/1.629% range.

- The curve has steepened slightly with the 2s10s spread trading up to 80.0bps

from a low of 78.7bps.

- The Dec18 Gilt future has edged down to 120.61 from a high of 120.8

- Breakeven inflation rates have inched lower with the 5-year benchmark down to

3.156% from 3.164%.

- The short sterling futures strip is 1.0-2.0 ticks lower.

- Earnings data came in better than expected with weekly wages ex bonus

increasing by 3.1% Y/Y in August vs to 2.9% survey.