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Gilts Still Bid

GILT SUMMARY

Gilts opened higher and rallied early into the session, losing momentum by late morning and trading sideways for the remainder of the day.

  • Gilt yields are now 2-5bp lower on the day with the curve 3bp flatter. Last yields: 2-year 0.0757%, 5-year 0.3264%, 10-year 0.7181%, 30-year 1.2376%.
  • The Jun 21 gilt future trades at 128.79, near the middle of the day's range (L: 128.53 / H: 129.00)
  • The DMO sold GBP2.25bn of the 1.25% Oct-41 Gilt. A further GBP562.5mn was taken up through the PAOF. The DMO will return to the market tomorrow to auction GBP800mn of the 0.125% Aug-31 index-linked gilt.
  • The BoE purchased GBP1.48bn of long-dated gilts with offer-to-cover of 1.81x.
  • Next up on the data calendar will be the RICS house price balance on Thursday.

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