On Tuesday, The Austrian....>

AUSTRIA AUCTION PREVIEW: On Tuesday, The Austrian Federal Financing Agency

(AFFA) re-opens E1.38bln total of and RAGB 0.5% Apr-27 and RAGB 1.5% Feb-47. 

- BACKGROUND: There are no coupon and redemptions but Tuesday is a heavy day of

issuance with Germany, Netherlands and the UK adding to any syndicated

offerings. 

- RV: The German Bund 0.25% Feb-27 to RAGB 0.5% Apr-27 spread is toward the

narrow end of its 3-month range at 22.4bp, even if it has widened slightly in

the past days. Austrian paper is optically attractive to swaps. Austria paper

trades cheap to France/Belgium in the front end (up to 5Y) but increasingly

expensive as the maturity increases. The 10Y offers little value. One idea to

entertain to to sell 30Y Dutch paper into 30Y Austria as the Dutch sector is

very expensive but cover ratios at Dutch pension funds are rising quickly and

mitigates the need to hedge liabilities so closely with long dated bonds.

- RESULTS: Bidding closes at 1000GMT. Auction results are due around 15 minutes

later.