France on Thursday...........>

FRANCE AUCTION PREVIEW: France on Thursday re-opens OAT 0.75% Nov-28, OAT 1.50%

May-31, OAT 1.25% May-34, and OAT 1.75% May-66 for a combined E7.5-8.5bln.

- BACKGROUND: The Nov-28 is the benchmark 10-Yr OAT, and sold at 0.67% average

yield and 1.9x cover when it was tapped at the July 5 auction along with the

May-31 and 15-Yr May-34 OATs (1.04% average yield, 2.2x cover). The May-31 was

most recently tapped Aug 2, at average yield of 0.98% and cover of 1.7x. This is

the first tap of the ultra-long May-66 since February, when it saw yield of

1.91% and cover of 1.2x at auction. Following this sale, France will be 82%

through 2018 issuance. 

- RV/HISTORY: The French curve has bear steepened since the July 5 M/L-term

auction, with the May-66 faring worst, with yield up 15.6bps at 1.808%. By

comparison, the Nov-28 yield (10-Yr) is up 7.5bps at 0.714% and the May-34 is up

9.8bps at 1.117%. Spreads remain elevated vs German equivalents, with the 10-Yr

33.8bps wide to Bunds, around levels at the early July auction but up from

28.1bps in mid-July and far from the 21.0bps 2018 low set in April.

- TIMING: Auction results are due around 0850GMT.