Spain will tap the market.....>

SPAIN AUCTION PREVIEW: Spain will tap the market for E4.0-5.0bln on Thursday. On

offer are the 0.0% Jan-25 Bono and the 0.50% Apr-30 Obli.

- BACKGROUND: The 0.0% Jan-25 Bono is the new 5-year issue. At the previous

auction of the 0.50% Apr-30 Obli on February 6, E1.7bln was sold at an average

yield of 0.35% and a bid-to-cover of 1.6X.

- RV/HISTORY: SPGBs have benefitted from the safe-haven bid and perceived

reduction in Spanish-specific political risk. The curve has bull flattened since

mid January, with spreads over bunds holding relatively steady over this period.

Breakevens have inched lower reflecting the persisting weakness in economic

data, with the 10-year benchmark trading down to 1.06% from a YTD peak of 1.17%

on January 20. There are no major data releases ahead of the SPGB auction,

although there will be heavy supply coming from France with E7.25-8.75bln in

OATs on offer.

- TIMING: Results are due out at 0945 GMT.