Theresa May has finally succumbed to...>

GILT SUMMARY: Theresa May has finally succumbed to the inevitable and today has

announced that she will resign as leader of the Conservative Party and UK Prime

Minister, effective June 7. A leadership campaign is due to begin in earnest

with MPs due to being voting the week of June 10. This process will whittle down

to the final 2 candidates and is expected to take at most two weeks. If the vote

goes to party members the second stage could take up to a month or so, but a new

 leader is likely to be in place by late July at the latest. Remember that when

May became PM Leadsom dropped out of the race after making it to the final two

with May, which sped up the process significantly. At present Boris Johnson is

favourite with the latest odds suggesting he is 5/4.

- The announcement was largely expected so gilts have not really reacted too

much, although 10y gilts are underperforming USTs and Bunds.

- Gilt futures are down -0.07 today at 129.73 with 10y yields up 1.7bp at 0.969%

and 2y yields up 0.8bp at 0.646%.