The Deutsche Finanzagentur...>

GERMAN AUCTION PREVIEW: The Deutsche Finanzagentur re-opens the Sep-20 Schatz

for E4.0bln.

- BACKGROUND: The Sep-20 Schatz is the 2-year benchmark with E4.0bln

outstanding. Germany has met 75% of planned issuance for 2018 compared to 77%

for the Eurozone as a whole. 

- RV/HISTORY: At the last auction of the Sep-20 Schatz, the Deutsche

Finanzagentur allotted E4.0bln at an average yield of -0.610% and real

bid-to-cover ratio of 1.268%. The issue currently trades at -0.530% up from a

YTD low of -0.680% on July 2 and 39.6bps inside the comparable EUR swap. More

broadly German bund yields have pushed higher since the beginning of September

and the curve has steepened with the 2s10s spread widening to 98.9bps from

92.4bps. 

- REDEMPTIONS: There are E15.8bln in EGB redemptions this week which will

support the auction.  

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