The UK DMO will go to market...>

GILT AUCTION PREVIEW: The UK DMO will go to market for Stg1.25bln nominal of 0

1/8% Aug-28 index-linked gilt today. This equates to around Stg1.55bln on a

clean inflation-adjusted basis.

- BACKGROUND: This is the 10-year linker benchmark and was last tapped on

February 26. Stg1.1bln nominal was originally allocated at a real yield of

-1.991% with a bid-to-cover ratio of 2.25. A further Stg155mln was then allotted

through the PAOF, around Stg10mln short of the maximum available. This is the

fourth reopening of the bond and another auction is expected in either August or

September.

- RV/HISTORY: Over the last month, real yields for the Aug-28 linker have been

sliding lower and are around half way between the lows seen ahead of late-March

lows (seen at the height of no deal Brexit concerns) and the mid-April highs

(seen in the aftermath). At the time of writing real yields on the Aug-28 were

roughly half way between real yields on the Nov-27 and Mar-29 linkers.

- TIMING: Results are due shortly after the auction closes at 10:30BST with the

PAOF available to successful bidders until 14:00BST.