The Belgian debt agency.....>

BELGIUM AUCTION PREVIEW: The Belgian debt agency taps E3.0-3.6bln of OLO 0.2%

Oct-23, 0.8% Jun-28, 1.45% Jun-37 and OLO 2.15% Jun-66 today. 

- BACKGROUND: No significant EGB redemptions to help. Belgium has issued E9.5bln

of its E31bln 2018 target so far (30%) and potentially today's auction could

bring that percentage to 42%, only second to Portugal in progress. 

- RV: The Belgian curve is almost on top of the OAT curve following some recent

underperformance. There are a few exceptions: the 3-4.5Y sector of the curve is

more expensive and the 5-10Y is cheaper than the French curve. Fortunately,

today's OLO Oct-23 swaps cheaper than an equivalent 5Y OAT but the OLO also

rolls down the swap curve better than the OAT. The yield spread between OAT

May-28 and OLO Jun-28 was flat in January but the OLO yields 3.5bp more today,

which favours strong demand for the 10Y from non-residents. The OLO Jun-37 is

flat to the French curve, offering nothing special but the Jun-66 appears cheap

to its OAT counterpart. The average bid-cover ratio at 2017 Belgian auctions was

1.62x.

- RESULTS: Auction results are due around 1010GMT.