#2: 1.625% Oct-54 gilt

The 1.625% Oct-54 gilt will also be on offer this morning with GBP1.5bln
due to be sold.

• This will be the fifth auction of the gilt so far this fiscal year (it is also
  due to be auctioned on 25 August). However, it is unclear whether the DMO
  will continue to issue the gilt at the same pace in the September to November
  period as only the 1.25% Oct-41 and 0.625% Oct-50 gilts are named as gilts that
  the DMO "expects to continue to build up…to benchmark size".
• The last auction of the gilt about a month ago saw a tail of 0.4bp and
  bid-to-cover of 2.30x. The tail was double the 0.2bp seen in the first three
  auctions of the fiscal year but the bid-to-cover was not substantially
  different. We note that the last three auctions in a similar part of the curve
  have seen tails of at least 1.0bp (two auctions of the 0.625% Oct-50 and an
  auction of the 1.75% Jul-57).

RESULTS: *Results will be announced shortly after the auction closes at
11:30BST with a further GBP375mln available to successful bidders via the PAOF.