The UK's Debt Management.......>

GILT AUCTION PREVIEW: The UK's Debt Management Office sells Stg. 2.75bln of the

1.0% Treasury Gilt Jul-2024 on Tuesday.

- BACKGROUND: This is a new issue. The current 6-year gilt benchmark is the

0.75% Sep-24 with Stg. 26.9bn outstanding.

- RV/HISTORY: Mirroring developments in the US Treasury market, the gilts curve

has flattened since the beginning of the year. The 2s10s spread has narrowed to

50.4bps from a high of 94.6bps on February 15. This is the result of both the

short end selling off and the long end rallying. In the case of the latter, the

10-year gilt yield has traded down to 1.255% from a year high of 1.646%. The

benchmark 6-year gilt yield has pushed higher over January and February, but has

since edged lower. The 6-year currently trades at 1.071%, down from a high of

1.312% and 30.5bps inside the comparable swap curve. Market-based inflation

expectations have been relatively stable so far this year, with the 5-year

breakeven rate trading within a 2.85-3.03% range.

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