Germany sells E4.0bln in.....>

GERMAN AUCTION PREVIEW: Germany sells E4.0bln in new 0.0% Oct-23 Bobl Wednesday.

- BACKGROUND: The current 5-Yr benchmark (Apr-23) was last sold on 6 June at

average yield of -0.19% and real cover of 1.3x (Buba cover of 1.6x). Although

there have been several technically uncovered German auctions in 2018, the last

four nominal taps have been covered. Sale of E4.0bln will bring total sales to

63% of planned 2018 German issuance, from 61% currently.

- RV/HISTORY: The German curve has bear steepened out to 15-Yrs over the past

month, with the 5-Yr widening by 4.2bps, which is more or less in line with the

overall move in the curve. That said, much of the move has occurred in the past

week amid thin volumes, with the 5-Yr yield rising from -0.30% to -0.26%. The

Apr-23 has remained steady versus equivalent EUR swaps over the past month, at

55bps inside, but that is 10bps richer since Italian political ructions began in

May. Grey market bid yields for the Oct-23 are around -0.17% to -0.18%, based on

Bloomberg quotes. This represents a discount vs -0.25% for the Apr-23 and -0.23%

for the Aug-23 Bund.

- TIMING: Results are due shortly after the auction closes at 0935GMT.