More GBP 5s10s steepening likely

A pick-up in gilt supply and soft auction covers support more 5s10s steepening. But strong overseas buying and the coming September Bank of England (BoE) bid which should see the Bank of England conduct its largest reinvestment exercise yet is cause for concern.

Seek to exit 5s10s steepeners in GBP by mid-year and look at 10y ASW wideners now, says BofA Merrill Lynch