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BOND SUMMARY

EGB/Gilt: Risk-Driven Bear Steepening

US 10YR FUTURE TECHS

(U1)‌‌ Consolidating

COMMODITIES

LEVELS UPDATE: Oil down but metals higher

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

GILT AUCTION PREVIEW
GILT AUCTION PREVIEW: The UK Debt Management Office (DMO) taps the 20-Year
benchmark 1.75% July 2037 Gilt Tuesday for Stg2.5bln. 
- BACKGROUND: The elephant in the room is the UK domestic political uncertainty
and potential BoE rate hike. There are no assisting coupon/redemption payments. 
- RV: The 1.75% 2037 Gilt trades at 1.995% mid-yield, which very close to the
best yield offered since Feb. Also, on the helpful side is the cheapening of the
UK curve to swaps and the security on sale today offers an ASW+30bp spread.
However, the curve is quite flat and the spread to the 10Y benchmark, UKT 4.25%
Dec-27 is 58.4bp, close to its lowest since February despite the slight pop
steeper in the past week.  
- HISTORY: The Gilt 2037 has not been sold since May, when the yield was 1.758%,
cover was 2.15 times and there was a 0.2bp tail. 
- RESULTS: Auction results are due around 0935GMT