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On Thursday, Spain sells up...>

SPAIN AUCTION PREVIEW
SPAIN AUCTION PREVIEW: On Thursday, Spain sells up to E3.75bln of nominal and
linker bonds: between E2.0-3.0bln combined of 0.05% Oct-21 Bono and 0.25% Jul-24
Bono, and between E0.25-0.75bln of 1.00% Nov-30 BonoEi.
- BACKGROUND: The Oct-21 was last tapped on April 4, at average yield of -0.244%
and bid-to-cover of 3.25x. The 5-Yr benchmark Jul-24 was last re-opened on May
23 at average yield of 0.023% and 2.04x cover. Meanwhile, the last sale of the
Nov-30 linkers was March 7, achieving 0.111% real yield and 1.70x cover. A sale
at the top end of the target range would bring total 2019 Spanish issuance to
around 48% of the annual target (vs 45% currently).
- RV/HISTORY: There have been some big moves in both the Spanish nominal and
linker spaces in the past few months in line with the global bond rally. The
curve is negative out to 5-Yr (last -0.054%, with record low of -0.074% set
Tuesday), though spreads vs Germany are steady (around 55bps). The Nov-30`s real
yield of -0.234% is the lowest since launching in 2015; the 98.3bps implied
breakeven rate is the lowest since 2016 and well down from 150bps in mid-2018.
- TIMING: Results are due shortly after the auction closes at 0945BST.

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