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New 0.25% Jan-25

GILT AUCTION PREVIEW
  • The DMO will kick off issuance for FQ2 this morning with GBP3.5bln of the new 0.25% Jan-25 gilt on offer.
  • This will eventually replace the 0.125% Jan-24 gilt as the 3-year benchmark.
  • Auctions of the 0.125% Jan-24 gilt have always been strong with bid-to-covers never falling below 2.34x in any auction (indeed they have only fallen below 2.56x once in 2021).
  • Tails have generally been 0.2bp (in a range from 0.1-0.3bp).
  • We would expect a very strong auction this morning.
  • Timing: Results will be available shortly after the auction closes at 10:00BST with a further GBP875mln available to successful bidders via the PAOF.

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