The Deutsche Finanzagentur...>

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

benchmark 0.25% Aug-28 Bund today for E3bln.

- BACKGROUND: This is the 2nd top-up of the Aug-28 Bund issue that was first

launched on July 11 and the re-opening takes the current outstanding size to

E7bln. This issue is due to be re-opened 4 more times this year and the sale

will take German issuance YTD to E101.6bln or 69% of the DFA 2018 funding

target.

- RV/HISTORY: The Aug-28 Bund trades at 0.331% mid-yield and has put in very

little concession in outright terms ahead of the auction, having recently

richened to 0.3%. On the curve, the 10-year Bund looks rich given the flattening

in German 2-/10-year yield spread to +93bps - level not seen since June 27 2017

and the moderate steepening in 10-/30 area. The last top-up on Aug 1, the DFA

allotted E2.373bln at an average yield 0.47%, cover 1.8 times and real cover 1.4

times. The launch on July 11, the DFA alloted E3.188bln at average yield 0.36%,

cover 1.6 times and real cover 1.296 times.

- TIMING: Results are due soon after the auction closes at 0930GMT.