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

GILT AUCTION PREVIEW: The UK Debt Management Office will sell a new 1.75% Jan-49

gilt for Stg. 2.5bln on Tuesday. 

- RV/HISTORY: The long end of the gilt curve has oscillated wildly in 2018 with

yields gradually shifting lower. For comparative purposes, the benchmark 30-year

gilt trades at 1.833% and has held within a 1.660-2.041% range so far this year.

Market-based measures of inflation expectations have weakened since the

beginning of the year with the 30-year breakeven edging down to 3.317% from a

YTD high of 3.471% on February 7. The cost of default protection has increased

with the benchmark 5-year CDS trading at 28.6bps up from a YTD low of 14.7bps.

Potentially providing support to the auction are comments from EU Chief Brexit

negotiator Michel Barnier, who has indicated that a Brexit deal is 'realistic'

in 6-8 weeks. In addition, trade, services and monthly GDP data for July came in

better than expected and points to an improvement in economic activity. 

- TIMING: Results are due shortly after the auction closes at 0930GMT.