Spain taps 3 bonds on.........>

SPAIN AUCTION PREVIEW: Spain taps 3 bonds on Thursday for E4.5-E5.5bln. On offer

are the 0.35% Jul-23 Bono, 1.60% Apr-25 Obli and the 5.15% Oct-44 Obli.

- BACKGROUND: Spain is slightly ahead on issuance for the year, with a

successful auction tomorrow taking total issuance to 62% of target.

- RV/HISTORY: Spanish bonds hit a bout of turbulence over the past month as a

result of the spill-over from Italian political risk and the election of a new

prime minister in Spain. The benchmark 5-year Bono yield has been particularly

volatile, with the yield oscillating in a 0.241-0.516% range since the end of

May. It currently trades at 0.330%, which is 59bps above the 5-year German bund

and 4bps outside the comparable EUR swap. Reflecting the flattening of the

Spanish sovereign curve, the 7-year Obli has outperformed, with the yield

dropping to 0.686% from a recent high of 1.041% on May 29. While the off-the-run

30-yr Oct-44 Obli yield has found resistance at around 2.30%.

- TIMING: Auction results are expected around 0840GMT.