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France Will Sell OATs/Linkers For E8.5-10.0bn On Thursday

France will hold an auction for both OATs and linkers on Thursday with a combined offering of EUR8.5-10.0bn.
  • BACKGROUND: Previous auction results (date, volume, average yield, bid-to-cover): 1.75% May-23 OAT (20 May 2020, E1.99bn, -0.53%, 2.80x), 0.0% Feb-26 OAT (15 Oct 2020, E3.2bn, -0.64%, 1.72x), 2.75% Oct-27 OAT (15 Oct 2020, E2.2bn, -0.59%, 1.54x), 0.10% Mar-26 OATEi (17 Sep 2020, E0.62bn, -1.12%, 3.56x), 0.10% Mar-36 OATi (8 Jul 2020, E3.0bn, -0.63%, Synd), 0.10% Jul-36 OATEi (20 Aug 2020, E0.33bn, -0.99%, 2.20x).
  • RV/HISTORY: OATs initially sold off following the announcement that Pfizer has an effective Covid vaccine, but quickly reversed with yields now once again probing multi-month lows. With economic activity undermined by fresh social restrictions, the ECB has continued to drop hints of fresh stimulus by December, which will keep OATs well supported. Spain will hold an auction of Bonos/Oblis just before the OAT auction, although the recent history suggests the market will have little difficulty in absorbing the combined supply.
  • TIMING: OAT results are due out shortly after the auction closes at 0950GMT. Linker results are published an hour later.

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