While Foreign Secretary........>

GILT AUCTION PREVIEW: While Foreign Secretary Jeremy Hunt and Home Secretary

Sajid Javid have attempted to curry favour with eurosceptic MPs by claiming that

they would vote leave in a second referendum (both voted to remain first time

around), the ascendant Rory Stewart refused to answer how he would vote during a

party hustings event. Given that Boris Johnson remains the clear favourite in

the race, the perception that Rory Stewart is not a true supporter of Brexit

will make it difficult for him to close the gap.  

- The Sep-19 gilt future trades at 130.12, down 13 ticks from Friday's close and

8 ticks off the day's low; L-H: 130.04-130.32.

- Gilt yields are 1-2bps higher on the day. Cash yields (Last / 1d chg / L..H):

2Y (0.6052% / +1bp / 0.5937%...0.6066%); 5Y (0.6362% / +0.7bp /

0.6246%...0.6376%); 10Y (0.8537% / +0.8bp / 0.8421%...0.8553%); 30Y (1.453% /

+1.7bp / 1.4402%...1.4543%).

- Short sterling futures trade mixed with greens underperforming: W (trades

mixed); R (broadly flat); G (- 0.5/1.5 ticks); B (- 0.5/1.0 ticks).