The Deutsche Finanzagentur...>

GERMAN AUCTION PREVIEW: The Deutsche Finanzagentur will tap the market for E3bln

today. On offer is the 0.25% Feb-29 Bund, which is the current 10-year

benchmark. 

- BACKGROUND: At the last auction of the 0.25% Feb-29 Bund, E2.4bln was allotted

at an average yield of 0.12%, Buba cover of 2.5x and real bid-to-cover of 2.0x.

Germany has raised E40.8bln year-to-date (in cash terms), which is 26% of target

for 2019.

- RV/HISTORY: The cumulative impact of global economic uncertainty, the domestic

industrial slowdown, intensifying Brexit risks and combined dovish surprises

from the ECB and Fed, have exerted considerable pressure on the long-end of the

Bund curve. The 2s10s spread trades at 52.7bp down from 108.5bp in October. The

0.25% Feb-29 Bund trades at a yield of -0.039%, returning to negative territory

for the first time since 2016 and trading 50.6bp inside the comparable EUR swap.

- TIMING: Results are due shortly after the auction closes at 1030GMT