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SEB Sees Today's NO Bond Auction Running Risk of Reducing Market Confidence

NORWAY
  • Following the disruptive auction this morning of Norway's 1.75% Mar-25 bond, SEB write that today's sale runs the risk of reducing confidence in the Norwegian bond market.
  • This follows the auction this morning that saw the 2025 bond tapped at 1.40%, 45bps above the pre-auction mid-yield of 0.95%. Shortly following the auction, the Norwegian sovereign curve traded sharply higher and flatter, with the short-end 3y up by 5.8bps, while the 10y rose 0.5bps.
  • SEB cite the Norges Bank as having said they considered cancelling the auction, but decided to follow through on the sale. Nonetheless, the Bank said "it will not accept similar auction results in the future".
  • They conclude that "given today's results, we see a large risk that the market will remain cautious in the coming auctions."

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