Unwind

Gilts have trimmed earlier losses but continue to trade below Friday's closing levels as the EU and UK strike a markedly more optimistic tone on the prospects of a trade deal, having last week ratcheted up warnings that a no-deal outcome had become more likely.

• Although the thorny issues of level playing field provisions remain, UK PM Boris Johnson is reported to have made a significant concession which has breathed life into negotiations.
• Gilt yields are now 4-7bp higher on the day with the curve bear steepening. Last yields: 2-year -0.0883%, 5-year -0.054%, 10-year 0.2333%, 30-year 0.7774%
• The Mar-21 gilt future trades at 135.10, close to the middle of the day's range (L: 134.81 / H: 135.51).
• The short sterling futures strip has steepened with whites/reds up 1.0-4.0 ticks and greens/blues up 4.5-6.0 ticks.
• Looking ahead, tomorrow see the release of claimants count data for November and employment/wage data for October.