AUCTION PREVIEW: France, Spain Taps as Core Bonds Consolidate
Source: BFW (Bloomberg First Word)
Tickers
3413Z GR (Federal Republic of Germany)
People
Erjon Satko (Merrill Lynch International)
Luca Cazzulani (UniCredit SpA)
Nishay Patel (UBS Global Asset Management Japan Ltd)
Puja Sawant (Citigroup Inc)
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UUID: 7947283
(Bloomberg) -- French 2031 bond on auction today looks attractive on the domestic curve, while Spain’s 2030 inflation-linked bond appears cheap as supply dynamics lend support, analysts write in client notes.
Alert: HALISTER1- Spain taps SPGB July 2021, April 2026 and Oct. 2046 benchmarks for an estimated EU5b, SPGBei30 for EU0.25-0.75b at 10:30am CET
- France taps May 2026 and May 2031 benchmarks together with the May 2025 off-the-run for up to EU8b at 10:50 CET
- NOTE: Bund consolidation takes hold ahead of supply (see analysis here)
- BofAML (Erjon Satko)
- OAT May 2025 and May 2026 provide the highest carry and roll on French curve
- May 2025 does not look particularly attractive on the curve as the Nov24-May25-Oct25 micro-fly is trading at ~10.7bps, lowest since June last year
- Relative to Italy, Spain looks the cheapest in the 10y sector, with spread trading at 22bps, near YTD high
- Citigroup (Puja Sawant)
- SPGBei30 breakeven looks historically attractive vs BTPei32 and supply patterns are supportive
- SPGBei30 has cheapened 4bps vs SPGBei24 over the last week; bond looks less appealing vs swaps
- OAT May 2031 looks attractive on the domestic curve, in particular, 15y OAT vs 20y ahead of a possible new 20y in coming months and 15y RFGB, which have rallied significantly over the last month
- Unicredit (Luca Cazzulani)
- OAT May 2025 is relatively attractive compared to Oct 2025 (an old 30Y), based on yield and Z-spread analysis
- SPGB Oct. 2046 looks attractive for an extension trade vs Oct. 2044
- UBS (Nishay Patel)
- 10y France is close to richer end of the 6-mo. range on 5s10s30s, mainly driven by falling yields
- France 5s10s is at the flatter end of the 6-mo. range
Source: BFW (Bloomberg First Word)
Tickers
3413Z GR (Federal Republic of Germany)
People
Erjon Satko (Merrill Lynch International)
Luca Cazzulani (UniCredit SpA)
Nishay Patel (UBS Global Asset Management Japan Ltd)
Puja Sawant (Citigroup Inc)
To de-activate this alert, click here
UUID: 7947283