The Deutsche Finanzagentur...>

GERMAN AUCTION PREVIEW: The Deutsche Finanzagentur re-opens the 10-year

benchmark 0.5% Aug-2027 Bund for up to E3bln on Wednesday.

- BACKGROUND: Germany has sold E91bln in conventional bonds YTD and E4.5bln in

linkers YTD. This is the second top-up of this 10-year Bund and is due to be

re-opened again 6 more times this year. 

- RV: The 10-year 0.5% Aug-2027 Bund trades at 0.491% mid-yield -- having

richened up by around 9bps since the last top-up on July 12. That said, the

recent steepening in German 2-/10-year yield spread to +120bps implies some

cheapening in 10-year sector.

- HISTORY: The 10-year Bund has seen decent this year with an average bid-cover

is 1.56x. The last auction on July 12, the DFA allotted E4.01bln at an average

yield of 0.26%, bid-to-cover

ratio of 1.4 times, retained 19.82% of the sale. Prior to this, the old 0.25%

Feb-2027 Bund was last sold on June 14, the DFA allotted E2.49bln at average

yield 0.26%, cover 1.5 and retained 16.9% of the sale.

- RESULTS: Auction results are due after bidding close at 0930GMT.