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

GILT AUCTION PREVIEW
GILT AUCTION PREVIEW: The UK Debt Management Office will sell a new 1.75% Jan-49
Gilt for Stg2.5bln 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.

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