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FRANCE AUCTION RESULTS

France Sells E10.355bn of OATs

RBNZ
RBNZ: VIEW: BNZ note "this is a massive programme, equivalent to around 10% of
GDP, in just 12 months. Ignoring the soon-to-mature Apr-20 NZGB, there are
around $55b of nominal NZGBs outstanding. The RBNZ's QE programme amounts to
around 55% of the current size of the nominal market, although the size of the
government bond market will increase significantly over the next 12 months too,
which will dilute the RBNZ's ownership. The ultimate impact on yields will
depend on whether the programme actively reduces the free-float of NZGBs
outstanding (reducing the amount of bonds in private sector hands). The size of
the programme is an unambiguous positive for the NZGB market and will provide
investors with confidence that the RBNZ will provide a backstop to the market
amidst soon-to-be much higher issuance volumes from New Zealand Debt Management.
The RBNZ is, in effect, stepping-up to fund the government."
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com