EM CEEMEA CREDIT: Orlen: MoU signed on acq. of Azoty assets

ERQ5 98.125/98.1875/98.25c ladder, bought for 1.25 in 4k.

GBP STIRs essentially flat, with Tsys trading roughly in line with levels that prevailed at yesterday’s SONIA settlement, while Bund futures are lower vs. levels seen in that window.

• BoE-dated OIS shows 21bp of easing for August, 28bp through September, 46bp through November and 55bp through year-end.
• Doves have been unable to push year-end pricing sustainably beyond 55bp of cuts in recent sessions.
• With only 4 meetings left in the year, further dovish cues, most likely via a further deterioration in the labour market, are probably required to generate a meaningful extension of the recent move.
• SONIA futures -1.0 to +0.5.
• Comments from BoE dovish dissenter Taylor (11:30 London) headline the UK calendar today.

• The DMO will return to the market this morning to hold a short 3-year gilt auction of the 4.375% Mar-28 gilt for GBP5.0bln nominal.
• The nominal size of this auction will be the largest seen for a number of years and is a step up from the GBP4.75bln sold in June, GBP4.5bln sold in April and the GBP4.25bln sold in earlier auctions in 2025.
• All of these auctions have seen solid demand with tails ranging between 0.2-0.5bp (0.3bp most recently and with the exception of the launch auction in November which saw a 1.0bp tail).
• The lowest accepted price has always exceeded the pre-auction secondary market mid-price at each auction. The bid-to-cover has always exceeded 3x, too (ranging from 3.08-3.48x).
• Even with a slightly soft auction of the 1.50% Jul-53 green gilt auction yesterday and last week's soft 15-year 4.375% Jan-40 auction and 4.25% Dec-46 tender, we think demand for short-dated gilts remains strong and we look for a successful auction today.
• Timing: Results will be available shortly after the bidding window closes at 10:00BST with a further GBP1.25bln available to successful bidders via the PAOF.