The Agence France Tresor.....>

FRANCE AUCTION PREVIEW: The Agence France Tresor will come to market for

E8.0-9.0bln on Thursday. On offer is the new 0.50% May-29 OAT and taps of the

1.25% May-34 OAT and 3.25% May-45 OAT.

- BACKGROUND: At the last auction of the 1.25% May-34 OAT, E1.88bln was sold at

an average yield of 1.11% and bid-to-cover of 1.72x. The 3.25% May-45 OAT was

last tapped in January 2017 with E2.02bln sold at an average yield of 1.76% and

a bid-to-cover ratio of 1.93x.

- RV/HISTORY: The French OAT curve has flattened since the beginning of the year

as concerns over the economic outlook has pressured the long-end. Spreads over

bunds have similarly compressed slightly with the 10-year spread trading at

38.2bps down from 48.7bp at the beginning of the year. The 1.25% May-34 OAT

trades at a yield of 0.986% down from a YTD high of 1.169% and 4.4bps inside the

comparable EUR swap. The 3.25% May-45 OAT trades relatively cheap on the curve

(23.7bps above the comparable EUR swap) with a current yield of 1.409%.

- TIMING: Results are due shortly after the auction closes at 1000GMT