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The UK Debt Management.........>

GILT AUCTION PREVIEW
GILT AUCTION PREVIEW: The UK Debt Management Office (DMO) taps its new 5-year
benchmark Gilt 0.75% Jul-23 on Wednesday for Stg2.75bln. 
- BACKGROUND: There is a large redemption on Aug 25 but excluding DMO and BoE
holdings, this is only Stg2.8bln, nearly perfectly matching supply. Note that on
4 Sep, the BoE starts reinvesting redemptions.
- RV: The 5-7Y section of the Gilt curve offer the best in the way of roll and
carry but it is only around 5.5bp every 3 months. Fast money accounts will like
moving from the late-2021 to mid-2022 because it trades expensive to the swap
curve. Instead, the 7Y swap spreads have been making the 2023 to 2024 Gilts
cheaper to swaps. 
- HISTORY: The past six 5Y Gilt auctions have seen a 2.4x average cover and
0.2bp tail. 
- RESULTS: Auction results are due on 'DM01' around 0935GMT (1035BST)

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