France tap 3 OATs Thursday...>

FRANCE AUCTION PREVIEW: France tap 3 OATs Thursday for E7-8bln indicative size.

On offer is the recently introduced 0.00% Feb-21 OAT, 0.00% Mar-23 OAT and

off-the-run 6% Oct-25 OAT. An hour later France sells E1.5-2.0bln OATi 0.1%

Mar-25, OATei 1.85% Jul-27 and OATei 0.1% Jul-47.

- BACKGROUND: There are no French coupon or redemption payments to help.  

- RV: There is good micro-RV for the two more liquid nominals. The ASW of the

OAT Mar-23 appears very cheap compared to other OATs and semi-core bonds in the

sector, it even looks cheap to lessor rated Irish debt. The same can be said of

the Feb-21, which trades cheap to swaps compared to similar maturity OATs and

2.9bp above an OAT cubic spline curve. The 2-10Y French curve has steepened to

its best in almost a year and the 2-5Y in particular. Small extension trades can

help these auctions shorter nominals. The off-the-run has a very elevated handle

of 141.0 and will be for a specific need but has cheapened after the tap was

announced. Linkers have performed strongly lately but inflation is stirring

globally. 

- RESULTS: Nominal cut-off at 0950GMT, results 10mins later. Linkers +1 hour.