On Wednesday the Deutsche....>

GERMAN AUCTION PREVIEW: On Wednesday the Deutsche Finanzagentur comes to market

for E3.0bln with the 10-year benchmark 0.25% Aug-28 Bund. 

HISTORY: At the last auction of the 0.25% Aug-28 Bund on October 10, E2.41bln

was allotted at an average yield of 0.55%, bid-to-cover ratio 0.91x, and a Buba

cover of 1.1x. 

BACKGROUND/RV: The 10-year benchmark bund currently trades at a yield 0.427%,

roughly down 12bps in the last month as geo-political issues and the sell off in

equities set a risk off sentiment for October. On Nov 6 the yield fell from

0.428% to 0.408% on the back of a tweet from a senior lawmaker in the Northern

Irish party which props up UK PM May suggesting a no-deal Brexit was likely. It

then rebounded to 0.425% after positive signals from UK Foreign Secretary Raab,

showing the benchmark yield is currently very responsive to the headlines.  

Since the last auction the 2s10s curve has bull flattened amid wider long term

macro uncertainty and the expectation that the ECB won't increase rates until

Sep-19.    

TIMING: Results are due after the auction closes at 0935GMT.