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The DMO will sell Stg1bln of...>

GILT AUCTION PREVIEW
GILT AUCTION PREVIEW: The DMO will sell Stg1bln of 0.125% Aug-28 linkers on
Thursday.
- BACKGROUND: This will be the eighth re-opening of the Aug-28 Gilt linker since
its initial sale in 2018. The last sale of this issue on Oct 29 raised
Stg1.1bln, at -2.478% real yield and 2.61x bid-to-cover. According to Tradeweb,
the Aug-28 currently trades at -2.449% real yield (bid), with breakevens around
317bps. These levels are more or less the same as they were in mid-October,
following the government's decision to call an election. Real yields jumped to
7-month highs post-Dec 12 election, but came back quickly afterward.
- Auction bid-to-cover ratios were comfortably rangebound between 2.2-2.4x in
all 2018-19 re-opens until Oct 29 when we saw 2.61x cover amid the UK general
election campaign.
- RESULTS: Results will be available shortly after 1030GMT.
-  A further Stg150mln nominal will be available to successful bidders through
the PAOF later in the day.

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