The Deutsche Finanzagentur...>

GERMAN AUCTION PREVIEW: The Deutsche Finanzagentur will sell a combined E750mln

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 0935GMT.