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SPAIN WILL SELL OBLIS/BONOS ON THURSDAY FOR E4-5BN

SPAIN AUCTION PREVIEW
Spain will come to market on Thursday for a tap of EUR4.0-5.0bn. On offer are the 0.0% Apr-23 Bono, 0.80% Jul-27 Obli, 4.70% Jul-41 Obli and the 1.00% Oct-50 Obli.
  • BACKGROUND: Previous auction results (date, volume, average yield, bid-to-cover): 0.0% Apr-23 Bono (18 Jun 2020, E2.2bn, -0.24%, 2.15x), 0.80% Jul-27 Obli (6 Aug 2020, E1.98bn, -0.02%, 1.22), 1.00% Oct-50 Obli.(16 Jul 2020, E2.1bn, 1.21%, 1.42x)
  • RV/HISTORY: SPGBs have rallied sharply since the beginning of September and the curve has bull flattened; the benchmark 10-year yield has traded down to 0.254% from 0.398% on Sep 1, while the 2s30s spread has narrowed to 156bp from 168bp over the same period. Spreads over bunds have also narrowed with the 10-year differential edging down to 75bp from 82bp at the start of September. There is no tier 1 data released ahead of the Thursday auction and the runup to the BoE MPC data later in the session will have no impact on SPGBs.
  • TIMING: Results are due out around 0945BST.

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