### POV: The BoE are due to reinvest the......>

GILTS: ### POV: The BoE are due to reinvest the cash flows of Stg10.1bln

associated with Gilts maturing on Aug 25 and Sep 7 starting on Sep 4. With the

Bank aiming to purchase Stg1.125bln at each operation over 3-weeks could have an

impact on 10-yr Gilt yield.

- Looking at past operations the 10-yr Gilt yield has reacted differently, with

the yield actually rising around 85bps during the 6-month period of when the APF

was raised by Stg60bln in August 2016. However yield fell around 25bps during

the February 2017 operation to reinvest the Stg11.6bln of maturing Gilts.

- In February only Stg775mln was purchased at each operation, spreading the

purchases over 5-weeks, while the upcoming operation aims to purchase

Stg1.125bln over only 3-weeks. While during this time there is only two Gilt

auctions scheduled from the DMO in 10-yr (Sep 13) and 30-yr (Sep 19) which could

total Stg5bln. Whereas in February there was a total of 7 auctions totalling

Stg14bln.

- With the next FOMC meeting not until Sep 20 there seems little in the way of

there being upward pressure on the 10-yr Gilt yield in the short-term.