Two of the market’s most interesting rumours concern the UK Debt Management Office’s plans for future issuance. First, the DMO is said to be considering a syndication rather than an auction for its 50-year inflation-linked bond in September.
The first 2055 gilt auction in May was covered 1.6 times, but index funds didn’t buy as expected and banks had to unwind their long positions. Icap fixed-income strategist Don Smith predicted that July’s £2.25 billion ($3.9 billion) tap would be covered between 1.2
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