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UK PM Again Raises Prospect of No-Deal Brexit

GILT SUMMARY

Focus today has been on the EU summit and the lingering stalemate in trade discussions between the UK and EU. In a bid to add fresh momentum to struggling Brexit negotiations, UK Prime Minister Boris Johnson has argued that preparations must be made for a no-deal scenario. Johnson further stressed that Brussels would need a fundamental change of approach to secure a deal.

  • The market has so far largely shrugged off today's developments with equities inching higher and cable flat on the day.
  • It is a similar story for gilts, which have lack convincing direction today and now trade around yesterday's close. Last yields: 2-year -0.0657%, 5-year -0.0833%, 10-year 0.1736%, 30-year 0.7234%.
  • The Dec-20 gilt future trades at 136.64, near the middle of the day's range (L: 136.47 / H: 136.97).
  • Short sterling futures are 0.5 ticks higher in whites/reds and broadly flat in greens/blues.

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