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Better auction than 2 weeks ago - market relieved, but still not "strong" auction

GILT AUCTION RESULTS
  • Better auction for the 30-year gilt than a couple of weeks ago (the final auction before the new 30-year issue is launched in January).
  • However, note the smaller auction size seen today (GBP2.00bln vs GBP2.75bln previously).
  • The price of the 3.75% Oct-53 gilt has moved higher on the auction result - above the average price at auction - as the worst fears surrounding the auction have not been realised.
  • However, even though this auction is an improvement, the lowest accepted price at today's auction was still lower than the pre-auction mid-price, again despite the smaller size.

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