Austria's Federal...........>

AUSTRIA AUCTION PREVIEW: Austria's Federal Financing Agency on Tuesday taps the

0.75% Feb-28 RAGB and 4.15% Jan-37 RAGB for a combined E1.15bln. 

- BACKGROUND: AFFA has seen broadly strong demand this year, although three

auctions have been uncovered. A successful auction today would take YTD issuance

to 59%.

- HISTORY: The 0.75% Feb-28 is the benchmark 10-year RAGB and has rallied

sharply over the past month. It has traded down from a peak of 0.878% on March 6

to 0.580% and trades 27.5bps inside the comparable EUR swap. Similarly, the

4.15% Jan-37 is the benchmark 20-year, with the yield edging lower through June.

The issue currently trades at 1.061% from a June peak of 1.241% on June 11 and

towards the lower end of the 2018 range. The Austrian sovereign curve has

flattened, with the 2s10s spread narrowing to 112.1bps from 125.1bps on June 11

and a 2018 high of 133.6bps on February 15. There are E21.0bn in EGB redemptions

and E8.8bln in EGB coupons this week which may provide some support.  

- TIMING: Bidding closes at 0900GMT, with results due around 15min later.