***With E3.5bln sold today, Belgium has........>

EGBS: ***With E3.5bln sold today, Belgium has completed 94% of its E35bln

pre-announced 2017 funding plan. There are two extra auction dates left to issue

debt (23 Oct and 20 Nov) but only one would be needed to top off all funding.

- So what do they do? Adjust bills issuance, pre-fund 2017, reduce issuance

drastically or undertake larger buy-backs.

- Looking back to 2016 to understand their preference, we note that Belgium

faced a similar dilemma but chose to issue small amounts in its final two

auctions, just 1.87bln in Oct-2016 and E1.225bln in November.

- Orlando Green at Credit Agricole pointed out that while French election risks

may have played a role later on, a contraction of Belgian supply in Q4 2016 was

probably behind the earlier outperformance by BGBs of the OAT curve. Green added

that the downside to owning BGBs given the likely supply outlook is limited.