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0% Feb-31 Bund

GERMAN AUCTION PREVIEW
  • Germany will return to the market this morning to sell E4bln of the 10-year 0% Feb-31 Bund.
  • This will be the sixth and final auction of the issue before the new Aug-31 Bund is launched on 16 June.
  • Despite weakness in some other German auctions, demand for the 10-year benchmark has remained solid.
  • However, after yesterday saw the weakest Schatz auction since March 2020 (based on bid-to-cover) there will be increased focus on today's auction.
  • Bid-to-cover ratios have not fallen below 1.2x for the 0% Feb-31 Bund (bid-to-offers have been a minimum of 1.48x).
  • Despite the rise in yields we would expect to see another decent auction today.
  • At prevailing yields, this morning's auction would see the highest 10-year yield at auction since May 2019.
  • Timing: Results will be available shortly after the auction closes at 10:30BST.

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