November 12, 2024 12:42 GMT
UK DMO UPDATE: FQ4 Auctions Expectations Following DMO Consultation (1/2)
UK DMO UPDATE
We update our expectations for the gilt auction schedule for FQ4 (Jan-Mar). The full calendar will be released on Friday at 7:30GMT.
Shorts (7 auctions):
- 4.375% Mar-28 gilt: Due to be launched tomorrow (with no reopenings in FQ3). We look noted that we looked for 2 (possibly 3) auctions in FQ4, both GEMMs and investors favoured "up to three" auctions in FQ4. We think three auctions now look most likely in the quarter.
- New 5-year gilt: DMO says a launch and at least 2 reopenings (in line with our expectations and strongly supported by both investors and GEMMs). We pencil in a January launch with a potential maturity date in January 2030 (no maturity given by DMO yet or noted in the consultation minutes). The FY29/30 sees a lower volume of gilts maturing than other upcoming fiscal years and this would also give a decent gap to the 4.00% Oct-31 gilt. The consultation minutes affirms our expectation that the 4.125% Jul-29 gilt is unlikely to be reopened in FQ4.
- 4.00% Oct-31 gilt: DMO to reopen at least once. We had pencilled in 2 auctions (in addition to the 4 December auction) but in light of the feedback at the DMO consultation meetings, we now only look for one auction in the quarter.
Keep reading...Show less
208 words