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Pullback Considered Corrective


Holding Above Recent Lows


BLOCK, Large 3Y Midcurve Put Condor

Spain sells two nominal.......>

SPAIN AUCTION PREVIEW: Spain sells two nominal bonds for a total of between
E2.5-3.5bln Thursday, 0.05% Oct-21 Bono and 1.45% Apr-29 Obli, as well as one
linker for between E0.25-0.75bln: 0.65% Nov-27 BonoEi.
- HISTORY: The 3-Yr benchmark Oct-21 last sold on Mar 21 at average yield of
-0.18% and cover of 2.06x. The 10-Yr benchmark Apr-29 also sold on Mar 21,
receiving 1.10% yield and 1.55x cover. Looking further back, the Nov-27 linker
was previously auctioned in July 2018. 
- RV: Even with a risk-on rally on Wednesday Apr 3, Spanish spreads remain much
wider than month-earlier levels vs German Bunds. At 113bps, the 10-Yr spread is
off the 3-month high of 117bps at the beginning of the week, but just a few
weeks ago this was below 100bps. The risk off move since the Mar 21 auction on
the back of weak European economic data and Brexit fears means Bonos/Oblis have
weakened across most of the curve. But the 10-Yr has underperformed, with yields
up 4bps, vs the 3-Yr yield being down 4.8bps. A concurrent France 10-Year sale
Thursday could potentially weigh from a supply perspective.
- TIMING: Results are expected around 0945BST.