On Tuesday, Germany sells....>

GERMAN AUCTION PREVIEW: On Tuesday, Germany sells new Jun-21 Schatz for E5bln.

- BACKGROUND: The last Schatz sale on April 30 (for the Mar-21) saw -0.58%

average yield, 1.67x Buba cover, and 1.30x real cover. This is the first of two

sales by Germany this week, with the Finanzagentur returning Wednesday to

re-open Apr-24 Bobl for E3bln. Sale of both at the top of the target range would

bring Germany to around 49% completion of planned 2019 issuance, versus under

44% currently.

- RV/HISTORY: Limited grey market data (via BBG) suggests a mid yield of -0.643%

is being priced for the new Schatz, which is in line with current yield on the

current Schatz. In turn, this is off best levels of the month, hitting -0.668%

on May 15, but still well below the -0.50% area last seen in early March. The

2-year has traded remarkably steady versus equivalent EUR swaps of late, within

a 5bps range (36-41bps) since February.

- POSITIONING: MNI's futures Positioning Indicator suggests flat structural

positions on Schatz, with longs reduced last week.

- TIMING: Auction results are due out around 1030 UK time.