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Austria`s Federal...........>

AUSTRIA AUCTION PREVIEW: Austria`s Federal Financing Agency on Tuesday taps the
5Yr 0.00% Jul-23 RAGB and the 10Yr 0.75% Feb-28 RAGB for a combined E1.15bln.
- BACKGROUND: The 5Y Jul-23 was previously tapped on Feb 6, selling at avg yield
of 0.189% and bid-to-cover of 2.23x, while the Feb-28 last sold on May 8 at avg
yield of 0.707%, and bid-to-cover of 2.21x. This sale will put Austria at about
halfway through its 2018 planned issuance of up to E23bln.
- RV: Austrian yields have dropped amid a flight to quality in May triggered by
Italian political drama, with the 5Yr yield down 17bps in the past month to
-0.028%, and the 10-year down 8bps to 0.684%. Indeed, the belly of the curve has
outperformed every other segment in the past month, while the 10Y has
underperformed. The 10-year spread over Bunds hit a 2-year high of 37.0bps on
May 29, and while it has come back to 27.8bps, the spread is still 9bps wider
compared with a month earlier when the bond was last tapped, and 19.9bps outside
the 2018 low. As such, it looks a bit cheap. The 5-year has fared better, with
the spread over Bunds up by just 1bps in the past month.
- RESULTS: Bidding closes at 0900BST, with results due around 15min later.