France taps 4 OATs...........>

FRANCE AUCTION PREVIEW: France taps 4 OATs Thursday for a fairly decent

E7.5-E8.5bln indicative size. On offer are 0.50% May-26 OAT, 0.75% May-28 OAT,

1.25% May-34 OAT and 2.00% May-48 OAT, so potentially a lot of duration. 

- BACKGROUND: No coupon or redemption flows to help, although E28bln of a French

bond redeemed last Wednesday. The French AFT tends to always issue at the top of

the target range. 

- RV: The other off-the-run, the May-26 has cheapened vs swaps by 5.5bp in past

month and has widened by 2.5bp vs Bunds/DSLs/RAGBs but remains at tight levels.

The 0.75% May-28 currently trades at 0.804% around 8bp higher than 1-month ago

and 5bp cheaper vs swaps, while it has cheapened by 1.5bp vs German Bunds and

2.5bp vs Belgium. Yield on the May-34 have sold off around 10bps and has

underperformed swaps by circa 5bps and has recently cheapened vs Germany/Dutch

and Finland but from multi-year tights. Lastly the 30-yr OAT has sold off by

around 9bps since mid-April with the 10s/30s curve steepening by circa 4bps in

last week and has cheapened by 2bp vs Dutch paper.

- RESULTS: Nominal bidding closes at 0950GMT. Results are due around 1000GMT