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

GILT AUCTION PREVIEW
GILT AUCTION PREVIEW: The UK Debt Management Office (DMO) taps the 6Y Gilt 0.75%
2023 Gilt Thursday for Stg2.75bln. 
- BACKGROUND: There are no coupons or redemption payments in the Gilt market
this week but a Stg35bln redemption on 7 March that either gets reinvested by
the market or by the Bank of England from Mar 12. Domestic political risks are
elevated. 
- RV: Outright, the Gilt 0.75% 2023 yield clearly broke above 1.0% level over
the past month and currently sits at 1.17%. Switches from shorter maturity debt
like the 5Y benchmark 0.5% Jul-22 do not look particularly attractive at present
at 14.8bp, in part because the Gilt curve has shown few trends lately. There is
a very attractive looking spread against 5Y Germany or almost any other EGBs
following the recent re-rating of BoE rate hike risks.
- HISTORY: At the last tap on Jan18, the DMO sold Stg2.5bln total at an average
yield 0.993%, bid-to-cover ratio 2.07 times and it tailed 0.2bps. 
- RESULTS: Auction results are due around 1035GMT.

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