On Thursday, Spain re-opens...>

SPAIN AUCTION PREVIEW: On Thursday, Spain re-opens 0.05% Oct-21 Bono, 0.25%

Jul-24 Obli, and 1.85% Jul-35 Obli for a combined E3-4bln.

- HISTORY: All three bonds have been sold at auctions within the past month.

June 6 saw the sale of both the Oct-21 (-0.36% yield and 2.60x bid-to-cover) and

the 5-Yr Spanish benchmark Jul-24, (-0.10%, 2.55x). The Jul-35 is the 15-Yr

benchmark, last tapped on May 23 (1.47%, 1.26x).

- BACKGROUND/RV: ECB President Draghi's comments Tuesday that the PSPP limit

could be changed and that rate cuts were possible as a policy option flattened

the Spanish curve, with long end yields coming down swiftly. Relevant to issues

at this auction, the 2s/15s spread is touching the 2016 lows at 134.3bps, down

around 60bps in the past month. This is due to a combination of factors,

including Draghi, as well as falling periphery EGB risk premia which has

benefited the long end. The 10-Yr Spain/German spread is down 30bps in the last

month at under 70bps for the first time since April 2018. This auction will help

test any exhaustion after such extensive long-end outperformance.

- TIMING: Results are due shortly after the auction closes at 0945BST.