0% Mar-24 Schatz

Germany will come to the market on Tuesday to sell E5.5bln of the new on-the-run Schatz.

• On offer will be the 0% Mar-24 Schatz. ISIN: DE0001104875
• Auction history: This will be the first reopening of the new 2-year Schatz, which was launched on February 1 to replace the 0% Dec-23 Schatz (ISIN DE0001104867). The launch saw E6.0bln issued (E4.846bln allotted) at an average yield of -0.500%. The launch was technically uncovered with a bid-to-cover of 0.97x (the bid-to-offer was 1.20x).
• Previous issue: Germany launched the 0% Dec-23 Schatz on November 9 last year also for E6.0bln. The Schatz has since been reopened twice, once in the first week of December and January. These auctions issued E4.0 and E5.0bln, with E3.28bln and E3.96bln allotted respectively. The December auction saw an average yield of -0.710% and the bid-to-cover was 1.11x (bid-to-offer 1.36x), whilst the January auction saw an average price of -0.620%, resulting in a bid-to-cover of 1.56x and a higher bid-to-offer of 1.97x.
• Market colour: Schatz yields are around 55bp off the lows seen a week ago (at -0.335% at writing). This is the highest level since mid-February (with a peak of -0.218% on February 7). The recent move was initially on the back of soaring commodity prices and sanctions being placed on Russian and was intensified by a more hawkish than expected ECB meeting last week. Markets now price over a 90% probability that the deposit rate will be back to 0% by the end of this year.
• Timing: Results will be available shortly after the auction closes at 10:30 GMT / 11:30 CET.