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FRANCE T-BILL AUCTION PREVIEW
FRANCE T-BILL AUCTION PREVIEW: France's Agence France Tresor (AFT) on Monday
re-opens 3-month Dec 12, 2018 BTF for E2.5-2.9bln, 6-month Feb 13, 2019 for
E0.8-1.2bln, 9-month May 22, 2019 for E0.0-0.4bln, and 12-month Aug 14, 2019 for
E0.7-1.1bln.
- BACKGROUND: At the previous auction on Sep 3, France sold E3.0bln of 3-month
BTF at -0.551% average yield and 2.3x cover, E1.2bln of 6-month BTF at -0.590%
and 3.6x cover, and E1.1bln of 12-month BTF at -0.555% and 3.7x cover. - RV:
Since the Sep 3 auction, BTF yields are little changed, but the 3-month BTF has
outperformed, with yield dropping 0.9bps lower to -0.5566%. As such, the spread
to German equivalents has fallen by 1.5bps, potentially reducing relative
attractiveness.
- REDEMPTIONS: The auction is seen being supported by large BTF redemptions of
E8.8bln in the week, which will easily exceed the upper end of AFT's target
issue range total of E5.6bln.
- TIMING: Results due to be announced at around 1255GMT.

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