After the announcement by the Bank of England....>

UK: After the announcement by the Bank of England last week that it would slow

the pace of QE (see MNI BOE Review), the upcoming week will see a glut of

supply. Never before have five gilt auctions taken place in the same week and

this week will see the first test for the gilt market.

- Despite the slowdown in gilt purchases there are a couple of reasons to be

optimistic that the DMO's next remit revision may not be as high as had been

expected. First the OBR confirmed that GDP and tax receipts had fallen less than

it had assumed in its April scenario. Second, the DMO has cut the size of its

next weekly set of T-bill auctions to GBP1.5bln and has already begun winding

down its stock of T-bills. This is not something the DMO would be likely to do

if it was in urgent need of cash.

- The flash PMIs will be closely watched tomorrow as they will cover the period

of unwinding lockdown measures. Also tomorrow, PM Johnson is expected to

announce the results of a review of relaxing the 2-metre social distancing rules

and will confirm which businesses will be allowed to open from 4 July.

- For more see the Gilt Week Ahead sent to MNI Markets subscribers at 6:54BST.