On Friday, France re-opens...>

FRANCE AUCTION PREVIEW: On Friday, France re-opens three nominal OATs for a

combined E7.0-8.0bln: 0.50% May-29 OAT, 1.25% May-34 OAT, and 1.75% Jun-39 OAT.

- HISTORY: AFT last sold the 10-Yr and 15-Yr benchmarks at the April 4 auction,

with the May-29 yielding 0.39% at bid-to-cover of 2.06x, and the May-34 yielding

0.80% and 3.29x cover. The Jun-39 last sold on February 7, at an average yield

of 1.25% and cover of 2.09x.

- BACKGROUND/RV: There has been almost no change in yields overall compared with

the April 4  auction (the 10-Yr yield is up <0.1bps and the 15-Yr yield has

risen just 0.6bps). The curve has steepened slightly, though, with the 2Yr-5Yr

segment 2-4bps lower. Spreads are likewise relatively unchanged, with the 10-Yr

/ German Bund at 35.5bps, 1.8bps narrower. Swap spreads are unchanged (10-Yrs

still at 14.4bps inside equivalent EUR swaps).

- CASH FLOW: Following a week in which more than E40bln in cash was returned to

French bond markets due to redemptions in coupons, this sale may be better

supported than usual.

- TIMING: Results are expected around 0950BST.