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The Deutsche Finanzagentur...>

GERMAN AUCTION PREVIEW
GERMAN AUCTION PREVIEW: The Deutsche Finanzagentur will sell a combined 0.75bn
of bund linkers on Tuesday.
- BACKGROUND: On offer are the 0.50% Apr-30 BundEi and the 0.10% Apr-46 BundEi,
which have a combined E19.25bn outstanding. 
- RV/HISTORY: German bunds have been relatively volatile over the past month,
but have broadly rallied since the beginning of the year. As a result of the
longer end outperforming the curve has flattened, with the 2s30s spread
narrowing to 160.3bps from a YTD high of 195.4bps. Market-based measures of
inflation expectations have picked up slightly in August, but are down from the
2018 peaks. The benchmark 5-year breakeven trades at 1.16%, up from an August
low of 1.13%, but down from 1.38% in April. The -0.50% Apr-30 BundEi trades at
-0.978% and around the lows of the year. Similarly, the 0.10% Apr-46 BundEi
trades at -0.688%, down from a YTD high of -0.292% and a touch above the -0.727%
low.
- TIMING: Results are due shortly after the auction closes at 0935 GMT.

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