February 26, 2025 09:53 GMT
GERMAN AUCTION PREVIEW: 15-year Bunds
GERMAN AUCTION PREVIEW
This morning, Germany will hold its second 15-year Bund auction of the year. On offer will be E500mln of the 0% May-36 Bund (ISIN: DE0001102549) and E1.5bln of the 1.00% May-38 Bund (ISIN: DE0001102598).
- The size is a consistent with recent Bund auctions in the 15-year segment.
- Recent auctions in the German 15y segment have passed smoothly, with solid bid-to-covers (in a 1.61x to 5.49x range since July), bid-to-offers (1.29x to 4.81x range since July) and the low prices above the secondary market mid-prices throughout 2024.
- For the last 0% May-36 Bund auction on 9 October, the bid-to-cover stood at 4.87x, while the bid-to-offer came in at 3.98x. For the last 1.00% May-38 Bund auction on 4 September, the bid-to-cover stood at 5.49x, while the bid-to-offer came in at 4.81x.
- Bund positioning currently appears short, see our Europe Positioning Indicator here.
- The fiscal situation in Germany is characterized by some uncertainty at the moment after Sunday's snap elections were followed by talks of passing a bill on increased military spending using the outgoing parliament. This prompted some Bund weakness earlier this week - which was pared in the meantime, however. For a round-up of analyst views on the German election, see here.
- The next 15y Bund auction will be on 26 March, 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. The timing is uncertain following the German election.
- Timing: Results will be available shortly after the bidding window closes at 10:30GMT / 11:30CET.
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