Free Trial

Spain's Tesoro Publico........>

SPAIN AUCTION PREVIEW
SPAIN AUCTION PREVIEW: Spain's Tesoro Publico sells E4.0-5.0bln of SPGB 0.05%
Jan-21, 0.45% Oct-22, 1.45% Oct-27 and 3.45% Jul-66 on Thursday. 
- BACKGROUND: Domestic politics have improved and spreads to the core have
tightened aggressively since previous auctions.  
- RV/HISTORY: From market contacts, we believe that there is a structural short
of Spanish debt against longs in Italy and this is likely concentrated in the
10Y. The Bonos-BTP spread has tightened to only 28.2bp, the tightest for a year
and BTPs offer a good leap off into Spain and can be justified by the closing of
positions ahead of year-end and look forward to Italian elections. As in all
markets, the Spanish curve is fairly flat and limits the attractiveness of small
duration extensions. However, the 10-50Y spread is 164bp and at all time highs.
Furthermore, the 50Y Bonos-BTP spread is a particularly tight 11bp and may tempt
a good hedge fund bid in what is a liquidity event for the Bonos 3.45% 2066.
- RESULTS: Auction cut-off is 0930GMT, results due around 0945GMT.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.