Halister News

(Bloomberg) -- Spain to sell 0.75% 07/2021, 1.95% 07/2030 for EU3.5b-EU4.5b, as well as 1.8% I/L 11/2024 for EU250m-EU750m, at 10:30am CET. Analysts say new 5Y bonds look expensive on the curve, though they still have scope for further outperformance given the outlook for the ECB.

• Societe Generale (Marc-Henri Thoumin)
  • New 5Y SPGB offers less generous pick-up than current 5Y; prospect of further ECB easing favors outperformance of 5Y sector relative to the curve, may support the sector until central bank meeting next week
  • SPGB 15Y has seen a bout of pre-auction cheapening in the sector; 10s15s looks steep vs BTP, expect some convergence after the auction

• Barclays (Huw Worthington)
  • 5Y trades on rich side compared to recent benchmark discounts; cross-market has widened sharply vs Italy, though has partly retraced; still offers double-digit yield pick-ups
  • Spain 15Y trades at 6-month cheaps on the curve after recent ~2bps of underperformance vs peers
  • On the curve 10s15s30s, 15Y sector has cheapened by ~4.5bps over past week; cross-market has widened by 5bps vs Italy over past week

• Mizuho (Antoine Bouvet)
  • New 5Y Spain should come ~2bps expensive relative to the curve
  • 15Y issue is most expensive on Spanish fitted curve, largely due to lack of low-coupon issues in long-end Spain

• Commerzbank (David Schnautz)
  • Tesoro likely to keep size toward middle of range, allotting ~EU3b to new 5Y bond
  • Grey market valuations look around fair value on curve; still neutral on Spain/Italy spreads, given political, banking issues