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Range Base Holds Firm




$8B Debt Issuance to Price, $3B Egypt 3Pt Leads

Offered Heading Into The Close


Following a relatively quiet start during the morning session, gilts sold off sharply in the afternoon and remain offered. The move follows general selling and bear steepening across US/European sovereign bond markets, while equities have been grinding out gains over the course of the day.

  • Gilt cash yields are close to unch at the short end at 1-5bp from the belly through to the long-end of the curve. The 2s30s spread is 5bp wider. Last yields: 2-year -0.0478%, 5-year 0.0777%, 10-year 0.5170%, 30-year 1.1075%.
  • The Mar 21 gilt future trades at 131.91, towards the bottom end of the day's range (L: 131.72 / H: 132.56).
  • The UK earlier sold GBP2bn of 1-/3-/6-month T-bills.
  • Data published this morning showed economic activity performing better than expected during the fourth quarter (preliminary Q4 GDP: 1.0% Q/Q vs 0.5% survey), while full year data confirm that the economy has suffered its worst recession in 300 years.
  • Next week see the release of preliminary PMI data for February as well as CPI and retail sales for January.
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