Soc Gen highlight the positive cash flow in...>

GILTS: Soc Gen highlight the positive cash flow in Gilts for Q1 of 2018 and

recommend going long 1.25% July 2027 Gilt vs matched maturity swap at -1.5bps

with a target of -5bps and stop at +2bps.

- Soc Gen say that Gilts issuance scheduled for Q1 2018 totals Stg25.4bln, "the

lowest gross level since Q3 2008" and is offset against Stg8.4bln worth of

coupons, Stg13.2bln or redemptions and Stg Stg18.3bln of buying from the BoE,

which "implies gilts should be well supportive against swaps."

- Richening of the 1.25% Jul 2027 Gilt "should be speeded up by BoE buying in

March, when the 1.25% Jul-2027 will be one of the three gilts in the 7-15y

bucket that the BoE can purchase," Soc Gen add.