UK PM Theresa May will meet with the...>

GILT SUMMARY: UK PM Theresa May will meet with the EU's chief Brexit negotiator

Jean-Claude Junker at 16:30 in Brussels in a bid to overcome the current

stalemate. The seemingly intractable nature of the Irish border issue limits the

possibility of a near-term breakthrough. 

- The Gilt curve has flattened as a result of the shorter end selling off. 

- The benchmark 2-year gilt trades at a yield of 0.803% up from 0.785% while the

10-year has oscillated within a 1.583/1.602% range.

- The 2s10s spread has narrowed to 77.5bps from 78.8bps.

- The Dec 18 gilt future has traded sideways since the open and currently at

120.86.

- Inflation breakevens continue to inch lower with the 5-year benchmark trading

down to 3.133% from 3.160%.

- The short sterling futures strip is broadly 2.0 ticks lower. Short sterling

option flow has been thin on the ground this morning. 

- CPI data for September was weaker than expected with the headline reading

coming in at 2.4% Y/Y vs 2.6% survey.