The Deutsche Finanzagentur...>

GERMAN AUCTION PREVIEW: The Deutsche Finanzagentur re-opens the Oct-23 Bobl with

a tap of E3.0bn on Wednesday.

- BACKGROUND: There is currently E4.0bn outstanding of the Oct-23 Bobl, which

was last tapped on July 25.

- RV/HISTORY: The German curve has flattened over the past month on the back of

the long end outperforming with the 2s10s spread narrowing to 96.0bps from an

August high of 103.7bps, while the 2s30s has edged down to 163.2bps from

167.8bps. The Oct-23 currently trades at a yield of -0.189% up from a month low

of -0.276% on August 20 and currently 49.3bps inside the comparable EUR swap. At

the last auction E4.0bn was sold of this issue at an average yield of -0.18% and

a bid-to-cover ratio of 0.91x. There are no EGB redemptions this week, but there

will be E6.7bn in coupons from Italy which may provide some support on the

margin.

- TIMING: Results are due soon after the auction closes at 0935GMT.