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Syndication delay? BOE active gilt sales due to start next Monday...

GILTS
  • We mentioned earlier in the week in our BOE Review (see here) that there was a chance that the green gilt syndication might get delayed if markets remained too volatile.
  • This morning's gilt operations update from the DMO still has it planned for this week, but it's looking less likely they will want to be holding a syndication tomorrow given current market moves.
  • Note that this would be a 30-year green gilt syndication - and the long-end of the curve has seen some particularly aggressive moves today.
  • Thursday remains a possibility for the transaction, in our view, but it's going to be very dependent upon how gilt markets trade tomorrow.
  • Next Monday is due to see the first BOE active gilt sales operation with GBP580mln of shorts on offer (3-7-year gilts). We noted yesterday that the Bank retains the right to cancel an operation for any reason up until the point the results are published (full comment here).
  • We wouldn't expect any comment on active gilt sales from the BOE until Monday at the earliest - they will really want QT to kick off as planned.

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