The Netherlands will come.....>

DUTCH AUCTION PREVIEW: The Netherlands will come to market on Tuesday to tap the

0.50% Jan-40 DSL for E1.0-1.5bn.

- BACKGROUND: This will be the second tap of this issue this year. At the last

auction of the 0.50% Jan-40 DSL on January 14, E1.2bn was sold at an average

yield of 0.30%.

- RV/HISTORY: Dutch government bonds have rallied sharply since the beginning of

June and the curve has bull flattened. At the longer end, spreads over bunds

have also narrowed with the 30-year DSL-Bund spread falling back to ~2bp from a

YTD high of 16bp in March. The 0.50% Jan-40 DSL currently trades at a yield of

-0.055%, down from a June high of 0.185bp and 12bp inside the comparable EUR

swap. German and French preliminary PMI data for June will be published ahead of

the Dutch auction, which could serve as a catalyst for broader price action in

EGBs. 

- TIMING: Results are due out after the auction closes at 1000BST