Free Trial

The Deutsche Finanzagentur...>

GERMAN AUCTION PREVIEW
GERMAN AUCTION PREVIEW: The Deutsche Finanzagentur sells the 2-year benchmark 0%
Mar-20 Schatz on Tuesday for up to E4bln in size. 
- BACKGROUND: There are no German redemption or coupon payments until an intense
period in mid-April. ECB expectations are shifting slightly as talk of mid-19
rate hikes grow. 
- RV/HISTORY: 2Y Schatz auctions are often technically uncovered, in fact the
past two have been. Valuations DO NOT look more enticing today. The roll from
the Schatz Dec-19 is the tightest it has been at 4.2bp and the 2Y German yield
is the lowest since last December following some underwhelming inflation data.
The asset swap spread for the Mar-20 was -43bp when it was launched a month ago
but is ASW-46.2bp today. Even if the 2Y Schatz is a safe-haven, it together with
2Y Dutch paper are very expensive. At the auction a month ago, the Buba
calculated cover was 1.25x, the yield was -0.51% (9bp above the current yield).
- TIMING: Auction results are due shortly after bidding closes at 1030GMT

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.