The Finanzagentur will tap...>

GERMAN AUCTION PREVIEW: The Finanzagentur will tap the market for E1.0bln on

Wednesday. On offer is the 1.25% Aug-48 Bund.

- BACKGROUND: The 1.25% Aug-48 Bund was last tapped on March 13 with E0.83bln

allotted at an average yield of 0.74%, bid-to-cover ratio of 1.26x and Buba

cover of 1.47x. Germany remains slightly behind the rest of the euro area in

terms of issuance for this year with 40.8% of the 2019 target currently met

compared to 43.4% for the wider bloc. 

- RV/HISTORY: Having sold off slightly in the first half of April, German bund

yields have started to push lower again and have extended the broad-based rally

in place since October last year. The temporary reprieve for global trade was

upended over the last week as Washington and Beijing unveiled a fresh slew of

tariff increases, which has renewed fears about the health of the global economy

and triggered demand for core EGBs. The 1.25% Aug-48 Bund serves as the 30-year

benchmark and currently trades at a yield of 0.575%, down from an April high of

0.739% and 47.4bp inside the comparable EUR swap.

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