At 7:30am BST the new gilt remit for fiscal...>

GILTS: At 7:30am BST the new gilt remit for fiscal 2020/21 will be released.

This will not be accompanied by new OBR forecasts but will nevertheless take

into account at least some estimates from the govt and DMO on the cash

requirements of the currently announced coronavirus fiscal measures. The

coronavirus measures released in the March Budget were finalised too late to be

included in the current remit.

- Irrespective of the total remit for the fiscal year, we would expect the April

pace of GBP45bln of issuance per month to be maintained at least through May and

June, and potentially longer. We would also expect extra issuance to be heavily

skewed towards nominals rather than linkers. With continued uncertainty over how

long the Covid measures will weigh on govt spending, we think the market will

focus more on the near-term issuance rather than the whole 2020/21 remit.

- Note that the March remit saw GBP156.1bln of planned gilt sales with no net

increase in the stock of T-bills. GBP12bln of additional Covid-19 spending was

announced at the Budget. Since then we have also seen the coronavirus job

retention scheme (30% takeup would cost GBP42bln according to the OBR), (1/2)