The Finanzagentur will tap...>

GERMAN AUCTION PREVIEW: The Finanzagentur will tap the market for E0.5bln on

Tuesday. On offer is the 0.50% Apr-30 BundEi.

- BACKGROUND: Germany has now met 48.8% of planned issuance for 2019 and is

broadly in line with the eurozone (49.3%). The 0.50% Apr-30 BundEi was last

tapped on April 9 with E0.56bln allotted at an average yield of -1.12%,

bid-to-cover ratio of 0.99x and Buba cover of 1.30.

- RV/HISTORY: Reflecting the risk-off mood, German bunds have rallied strongly

since the beginning of May, with yields now broadly edging lower for eights

months now. Concerns over the trajectory for inflation have resurfaced on the

back of the regional industrial shock, global trade headwinds and rising

political risks both in the eurozone and abroad. Market-based measures of

inflation expectations have fallen sharply for the euro area, with Germany

mirroring this trend: the 10-year German breakeven trades at 0.83%, down from

1.07% at the beginning of May. The 0.50% Apr-30 BundEi trades at a yield of

-1.155%, down from a YTD high of -0.824% and near the lows of the year.

- TIMING: Results are due around 1030BST