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DMO Consultation Minutes: Mediums

GILTS
  • There are 7 remaining medium auctions (1 already announced, 1 additional on 19 December, 5 in FQ4) with GBP24.6bln still due to be raised (GBP68.3bln target).
  • New 7-year gilt: GEMMs "widely favoured" a new 2031 gilt while there was "strong support" for a 2031 gilt from investors. In MNI's view, the most obvious maturity would be October 2031 (as this is around middle of the current coupon gap).
  • 4.625% Jan-34 gilt: "Almost all" GEMMs recommended the additional auction on 19 December to see a reopening of the 4.625% Jan-34 gilt, and it was "widely recommended" by investors. GEMMs then "very widely recommended" 3 reopenings of the gilt in FQ4 (with a minority of GEMMs supporting 4 reopenings in FQ4). Prior to the consultation, MNI had expected 2-3 reopenings (but we now expect 3 based on the consultation responses). Investors showed strong support for reopenings.
  • 3.75% Jan-38 gilt: MNI expects one reopening of the 3.75% Jan-38 gilt. There was "strong support" for a reopening from investors and GEMMs while there was "some support" from GEMMs for a second reopening.
  • 0.875% Jul-33 Green gilt: There were only isolated calls from GEMMs (and no mention from investors) about the 10-year Green Gilt. Ahead of the consultation agenda, MNI had expected one auction but we now think it's more likely that we see three openings of the 4.625% Jan-34 gilt (along with one each of the new 7-year gilt and the 3.75% Jan-38 gilt).
  • FQ4 auction dates: 04-Jan, 17-Jan, 14-Feb, 28-Feb, 13-Mar
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