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RV Should Facilitate Smooth Takedown Of 5-Year Auction

GILTS

RV metrics should facilitate smooth absorption of today’s 5-Year gilt supply.

  • The 2s5s curve currently sits at the steepest level seen since late ’22 (based on closing levels), while 5s have cheapened to fresh ’24 extremes on the 2-/5-/10-Year fly in recent sessions.
  • Gilts have also underperformed Bunds over the last month or so, providing some cross-market appeal.
  • Outright yields are the best part of 25bp off Monday’s low as global equities recover.
  • A reminder that yesterday’s 20-Year gilt supply was well-received.
Fig. 1: UK 2-/5-/10-Year Butterfly (bp)

Source: MNI - Market News/Bloomberg

Fig. 2: 5-Year Gilt/Bund Spread (bp)

Source: MNI - Market News/Bloomberg

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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