Spain taps E3.0-E4.0bln of....>

SPAIN AUCTION PREVIEW: Spain taps E3.0-E4.0bln of SPGB 0.45% Oct-22, SPGB 1.45%

Oct-27 and SPGB 2.9% Oct-46 alongside SPGBei 1% Nov-30 on Thursday. 

- BACKGROUND: It is a fairly liquid time of the year and today, there are E28bln

of German redemption and coupon payments. ECB APP holdings will be reinvested

back into Bunds but other flows may leak into Spanish or French auctions.

- RV/HISTORY: Peter Chatwell and Antoine Bouvet at Mizuho believe that "The 2022

area of the Spanish curve remains expensive in RV and is more liable to widen if

fears of a less dovish ECB are allowed to linger". Breakevens have risen

decently in the past weeks and months and the rise in oil prices may create

decent carry but this is usually more interesting for short-maturity linkers.

For the Oct-22, the 3 auction average bid-cover is 1.94x, the 3 auction average

for the Oct-27 is 1.75x, the 3 auction average for the Oct-46 is 1.5x. The 10Y+

linkers can be hit/miss affairs and the Nov-30 has not been issued since last

July when the bid-cover was only 1.3x.

- RESULTS: Auction bidding closes at 0930GMT with results around 0940GMT