The Finanzagentur will tap...>

GERMAN AUCTION PREVIEW: The Finanzagentur will tap the market for E1bln on

Wednesday with a sale of the 1.25% Aug48 bund.

- BACKGROUND: The 1.25% Aug48 bund serves as the 30-year benchmark and was last

sold on March 13 with E0.83bln allotted at an average yield of 0.74% and

bid-to-cover ratio of 1.26x.

- RV/HISTORY: Following a prolonged and sizeable rally since mid April, bunds

have pulled back slightly in July and the curve has steepened. There are still

few signs of a material improvement in economic activity to drive yields much

higher, while the ECB still seems to be edging in the direction of fresh

monetary easing. The 1.25% Aug-48 bund currently trades at a yield of 0.322%,

having recently hit a record low of 0.199% on July 4. The issue trades 43bps

inside the comparable EUR swap.

- TIMING: Results are due after 1030GMT.