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

GILT AUCTION PREVIEW: The UK Debt Management Office (DMO) taps Stg1.0bln of the
I/L Gilt 0.125% Gilt 2026 on Tuesday. 
- BACKGROUND: The DMO currently does one linker tap per month and the Stg1.0bln
being sold is a fairly normal size. There are Stg0.1bn of gilt linker coupons
available for reinvestment this week. 
- RV: The past month has seen the real yield of the I/L 2026 rise from a low of
-1.90% to -1.79%, yet this higher level is far from generous on the basis of
where it traded in 2017. The real yield curve is looking quite flat with a 14bp
spread to the UKTI 0.125% Mar-24. Breakevens have been fairly directionless in
this section of the yield curve. 
- HISTORY: At the last tap of this 2026 I/L Gilt issue on Nov 21, the DMO
allotted Stg1.0bln at an average yield of -1.853% and a bid-to-cover ratio of
2.99 times. 
- RESULTS: Auction results are due at around 1035GMT. 

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