UK monetary policy has been the........>

BOND SUMMARY: UK monetary policy has been the talking point in core bond markets

this morning. MPC member Michael Saunders, who was previously considered a hawk,

stated that even in the event the UK manages to agree a deal with the EU, rate

cuts may be needed. He said that uncertainty may continue to persist leading to

businesses continuing to delay investment decisions.

- UK 2-year yields moved as much as 6bp lower on the back of the speech and are

now around 4.4bp lower at 0.40%. 10y yields fell 5bp and are now down 2.9bp at

0.491%. Gilt futures are up 0.37 at 134.22.

- Bund futures had originally moved higher, dragged by gilts but are now little

changed on the day while UST futures are largely unchanged on the day too.

- The afternoon session sees a number of interesting US economic data releases

with durable goods and personal income/spending the highlights. There are also a

number of central bank speakers this morning with the ECB's Lane and de Cos due

up as well as the Fed's Quarles and Harker.

- TY1 futures are down -0-5 today at 130-04 with Bund futures down -0.03 at

174.29.