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GERMAN AUCTION PREVIEW: 0% Aug-50 Bund / 2.50% Aug-54 Bund

GERMAN AUCTION PREVIEW
BundesbankCentral Bank NewsCEEMEAEurozoneGermanyBulletMarketsFixed Income Bullets

This morning, Germany will hold its second 30-year Bund auction of the year. On offer will be E1bln of the 0% Aug-50 Bund (ISIN: DE0001102481) and E1.5bln of the on-the-run 2.50% Aug-54 Bund (ISIN: DE000BU2D004).

  • The size is a consistent with recent Bund auctions in the 30-year segment.
  • Recent auctions in the German 30y segment have passed smoothly, with solid bid-to-covers (in a 1.83x to 4.50x range since July), bid-to-offers (1.48x to 3.69x range since July) and the low prices above the secondary market mid-prices throughout 2024.
  • For the last 0% Aug-50 Bund auction on 16 October, the bid-to-cover stood at 2.24x, while the bid-to-offer came in at 1.84x. For the last 2.50% Aug-54 Bund auction on 15 January, the bid-to-cover stood at 2.76x, while the bid-to-offer came in at 2.19x.
  • The political situation in Germany is characterized by some uncertainty at the moment amid snap elections being scheduled for February 23. TV debates have passed without material turmoil in the last couple of days and the mainstream parties are expected to be able to form a government together - so we expect no impact from that on today's auction.
  • The next German auction will be E4.5bln of the 2.20% Mar-27 Schatz (ISIN: DE000BU22080) on February 18, while further openings of both Bunds on offer are not scheduled yet.
  • Note that we are also expecting a German 30-year Bund syndication at some point (likely in Q1). Tomorrow would be very unlikely now given the auction today, but we see a good chance over the next couple of weeks.
  • Timing: Results will be available shortly after the bidding window closes at 10:30GMT / 11:30CET.
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This morning, Germany will hold its second 30-year Bund auction of the year. On offer will be E1bln of the 0% Aug-50 Bund (ISIN: DE0001102481) and E1.5bln of the on-the-run 2.50% Aug-54 Bund (ISIN: DE000BU2D004).

  • The size is a consistent with recent Bund auctions in the 30-year segment.
  • Recent auctions in the German 30y segment have passed smoothly, with solid bid-to-covers (in a 1.83x to 4.50x range since July), bid-to-offers (1.48x to 3.69x range since July) and the low prices above the secondary market mid-prices throughout 2024.
  • For the last 0% Aug-50 Bund auction on 16 October, the bid-to-cover stood at 2.24x, while the bid-to-offer came in at 1.84x. For the last 2.50% Aug-54 Bund auction on 15 January, the bid-to-cover stood at 2.76x, while the bid-to-offer came in at 2.19x.
  • The political situation in Germany is characterized by some uncertainty at the moment amid snap elections being scheduled for February 23. TV debates have passed without material turmoil in the last couple of days and the mainstream parties are expected to be able to form a government together - so we expect no impact from that on today's auction.
  • The next German auction will be E4.5bln of the 2.20% Mar-27 Schatz (ISIN: DE000BU22080) on February 18, while further openings of both Bunds on offer are not scheduled yet.
  • Note that we are also expecting a German 30-year Bund syndication at some point (likely in Q1). Tomorrow would be very unlikely now given the auction today, but we see a good chance over the next couple of weeks.
  • Timing: Results will be available shortly after the bidding window closes at 10:30GMT / 11:30CET.