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France launch a new 3-yr.....>

FRANCE AUCTION PREVIEW
FRANCE AUCTION PREVIEW: France launch a new 3-yr nominal OAT and tap 2 other
OATs Thursday for a decent E6.5-E7.5bln indicative size. On offer is new 0.00%
Feb-21 OAT, tap of 0.00% Mar-23 OAT and 2.25% May-24 OAT.
- BACKGROUND: There are no French coupon or redemption payments to help but
there were a total of E41bln of payments from Italy, Austria and the Dutch which
could help. Recent sell-off in the short-end of the yield curve ahead of the
auction could see strong demand even if AFT issue at top end of target range.
- RV: French bonds in the 2020 to 2025 area have done well versus the swap curve
and spreads to Germany have tightened modestly since mid November but has pared
some of those gains since End of Dec, which could make the sector attractive.
- HISTORY: The AFT last tapped the short-end of the curve back in November last
year and that was for only E5bln. The 0.00% Mar-23 OAT was tapped that day for
E2.523bln at average yield -0.13% and cover of 2.27 times.
- RESULTS: Nominal bidding closes at 0950GMT. Results are due around 1000GMT

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