Germany will tap the 0.00%...>

GERMAN AUCTION PREVIEW: Germany will tap the 0.00% Sep-20 Schatz for E4.0bln on

Tuesday.

- BACKGROUND: Germany has met 82% of planned issuance for 2018, slightly below

the 84% average for the broader eurozone. There is currently E8.0bln outstanding

of the 0.00% Sep-20 Schatz.

- RV/HISTORY: Bund yields have pushed higher since the beginning of July, but

have pulled back in recent weeks as concerns about the regional economic outlook

have increased. The curve has also steepened since the summer and has similarly

narrowed slightly over the past week. At the last auction of the 0.00% Sep-20

Schatz, E4.0bln was sold at an average yield of -0.54%, with a Buba cover ratio

of 2.4x and real bid-to-cover ratio of 1.9x. The issue currently trades at a

yield of -0.574%, down from a recent YTD high of -0.494% on September 27 and

45.8bps inside the comparable EUR swap.

- REDEMPTIONS: There are E28.4bln in EGB redemptions this week which will

support the auction.

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