The DSTA will issue...........>

DUTCH AUCTION PREVIEW: The DSTA will issue E1.5-2.5bln of 0% Jan-24 on Tuesday

via DDA. 

- BACKGROUND. There is a lot of issuance today but not a lot in the 5-6Y section

of the curve and the small amount being sold, together with the low duration

means that this security is unlikely to weigh heavily on the market.

- RV. This is a very cheap security when one lines up the asset swap spreads

amongst the core/semi core. Indeed, the 0% Jan-24 trades at similar swap spreads

to the French curve, which simply does not happen along the remainder of the

yield curve. In outright terms, the Jan-24 yield has moved into positive

territory in late December, which is clearly a positive development for

potential demand. the Jan-24 was first and last sold in October at a yield of

0.05%, similar to where it trades now.

- TIMING. Direct Dutch auction begins Tuesday at 0900GMT when the DSTA will

announce the price at which Primary Dealers can buy the auction, results due

some time after.