CANADA: Liberals One Seat From Majority After Another Conservative Defection

• Short-dated auctions: 6 auctions scheduled:
  • We expect 2-3 reopenings of the 4.00% May-29 gilt and 2-3 reopenings of the 4.125% Mar-31 gilt. Both of these gilts are referred to as re-opening "at least once" in the quarter.
  • We also expect 1-2 reopening of the 4.125% Mar-33 gilt during the quarter which is transitioning into the short bucket before the new fiscal year.
• Medium-dated auctions: 3 auctions:
  • The DMO plans to reopen the new 10-year gilt that it proposed will be launched via syndication in April once in the quarter. We pencil in 2/16 June.
  • The DMO notes that it plans to reopen the 4.625% Mar-37 Green Gilt once in the quarter (it is due to be launched via syndication this week). We pencil in 21 May.
  • The DMO also notes that it will reopen the 5.25% Jan-41 gilt once in the quarter - we pencil in 2/16 June.
• There are no long-dated gilt auctions proposed for FQ1 (Apr-Jun). There are May and June tenders that are not specified for maturity that could be used for longs, however.

"*PORTUGAL CAN'T RULE OUT BUDGET DEFICIT THIS YEAR: FINANCE MIN." Bloomberg

The 2026 budget plan targeted a surplus of 0.1% GDP (vs 0.3% in 2025), so slipping into a deficit wouldn't be a major worry. A reminder that both S&P and Fitch have both upgraded Portugal's ratings outlook to Positive in recent weeks.

• As we had expected, there is a proposed 10-year syndication for April. We pencil in a GBP10-13bln size.
• A second syndication is also expected in June 2026 for a conventional long gilt in the 15-25 year area. The 5.25% Jan-41 gilt is still being built up and has since transitioned into the medium category (as it now has less than 15 years residual maturity). So it seems as though a new gilt with either a 20-year or 25-year maturity is most likely in our view.