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Inaugural medium-dated gilts sales op underway

BOE
  • The Bank of England's inaugural medium-dated (7-20 year) gilt sales operation is underway with the results due shortly after the auction closes at 14:45GMT.
  • On offer will be GBP750mln in cash terms.
  • Last Tuesday's inaugural short (3-7 year) gilt sales operation saw a bid-to-cover of 3.26x with 74% of offers for gilts with a maturity of less than 4 years likely due to the collateral shortage which is particularly acute for the shortest maturity gilts.
  • Given that we have a syndication of a Jan-38 gilt tomorrow and an auction of the Jul-33 green gilt on Wednesday, we may also see interest skewed closer to the 7-year part of the curve today too.

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