RESEND: The Finanzagentur....>

GERMAN AUCTION PREVIEW: RESEND: The Finanzagentur will tap the market for E1bln

on Wednesday. On offer is the 2.50% Jul-44 Bund.

- BACKGROUND: The 2.50% Jul-44 Bund was last tapped on October 17 with E1.15bln

allotted at an average yield of 1.04%, Buba cover of 1.40x and a real

bid-to-cover ratio of 1.06x. Germany is on track for issuance this year with a

third of the 2019 target currently met.

- RV/HISTORY: Having progressively flattened since October on the back of

elevated global economic uncertainty and an industrial slowdown at home, the

bund curve has started to steepen over the last two weeks. At this point it is

possible that much of the bad news has already been priced in, with several

recent developments - a 6-month Brexit extension, a surge in Chinese credit

growth and dovish shift at the Fed and ECB - suggesting that economic activity

could pickup in the near term and drive longer-end yields higher. The 2.50%

Jul-44 Bund trades at a yield of 0.666%, up from a recent low of 0.468% on March

27 and 54.1bp inside the comparable EUR swap.

- TIMING: Results are due after the auction closes at 1030GMT.