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France taps 3 nominal OATs...>

FRANCE AUCTION PREVIEW
FRANCE AUCTION PREVIEW: France taps 3 nominal OATs Thursday for between
E7.5-E8.5bln indicative size. There is a re-opening of an off-the-run OAT 1%
Nov-25, a brand new 10Y OAT 0.75% May-28 and a re-opening of the OAT 2% May-48. 
- BACKGROUND: There are no coupon or redemption payments to help the auction
today but France is unique in the big 4 Eurozone issuers in that domestic
politics is currently quite stable. The PSPP has been overbuying French debt
relative to the capital keys and at quite elevated durations.
- RV: The new 10Y will attract most attention and offers a 15.5bp pick up to the
OAT 1% May-27 in the grey market this morning. Mizuho write that their fair
value roll is 15bp and see value in 30Y OAT against European supras "in
particular the ESM". The OAT spread to 10Y Germany is quite generous at present
at 29bp (for the 2027 benchmarks). The 2048 yield looks to be trading in line
with the French spline curve. It was last issued on Aug 3 at a yield of 1.79%
and a lowly cover of 1.57x.
- RESULTS: Nominal Bidding closes at 0850GMT. Results due around 0900GMT.

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