GILT AUCTION RESULTS: 4.375% Mar-28 Gilt

• Euro stability last week allowed the softer data in the UK to support an extension of the EURGBP rally across 2025. The cross rose 0.66% on the week, posting its second consecutive weekly advance and the highest close since late August. The recovery further undermines the recent bearish theme and is suggesting scope for stronger short-term gains.
• Note too that a clear break of 0.8448, the Oct 31 high, strengthens the bullish technical theme, with the cross also now testing downtrend resistance around 0.8475, drawn from the 2022 and 2024 highs.
• Above here, 0.8494 represents the next topside target, followed by 0.8530, the 76.4% retracement of the Aug 8 - Dec 19 downleg. Support at the 50-day EMA moves up to 0.8341.
• Labour market data will headline the UK economic calendar tomorrow, while Eurozone flash PMIs on Friday should be impactful for the single currency.

New long 3-year:

• Maturity: 27 July 2028
• Coupon: Short 1st
• Spread set at MS+19bp (guidance was MS + 21 bps area)
• Size: EUR Benchmark (MNI expects E3-5bln)
• Books in excess of E24bln (inc E1.5bln JLM interest)
• ISIN: EU000A2SCAR0

New 10-year:

• Maturity: 29 January 2035
• Coupon: Long first
• Spread set at MS+50bp (guidance wasMS + 53 bps area
• Size: EUR Benchmark (MNI expects E3-5bln)
• Books in excess of E33bln (inc E1.5bln JLM interest)
• ISIN: EU000A2SCAS8

For both:

• Total size: MNI expects E7-8bln
• Settlement: 27 January 2025 (T+5)
• Bookrunners: BARCLAYS / BNP / JPM (DM/B&D)
• Timing: Books to close at 10:15GMT /11:15CET, today's business

From market source

• MNI: EURZONE NOV CONSTRUCTION PRODUCTION 1.2% M/M
• MNI: EURZONE NOV CONSTRUCTION PRODUCTION 1.4% Y/Y