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France taps 2 OATs on........>

FRANCE AUCTION PREVIEW
FRANCE AUCTION PREVIEW: France taps 2 OATs on Thursday for E6.5-7.5bn and 3
linkers for E1.25-1.75bn. On offer are the 0.00% Feb-21 and 0.00% Mar-23
nominals and the 1.10% Jul-22, 1.85% Jul-23 and 0.10% July-47 inflation-linked
issues.  
- BACKGROUND: There are no French coupon or redemption payments to help.
Political uncertainty in Italy could weigh on auctions across the euro bloc.
- RV: The nominal issues have sold off since the beginning of May, with the
Feb-21 trading at -0.305% and Mar-23 at 0.092% from -0.362% and 0.012%
respectively on May 3. The asset swap spread for both issues has held relatively
stable since the last auction on April 19, with the Mar-23 swap spread trading
32bps inside the comparable EURIBOR. The 2-10Y French sovereign curve has
steepened to 133bps from the month low of  129bps on May 3, with the 2-5Y spread
widening by 5bps over the same period. Inflation breakevens continue to grind
higher, with the 5-year benchmark touching 1.348% on May 16 from 1.188% at the
beginning of January.  
- RESULTS: Announced 10mins after the 0855GMT cut-off. Linkers +1 hour.

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