AUCTION PREVIEW: Strong Demand Expect for SPGB Supply
Source: BFW (Bloomberg First Word)
Tickers
2539Z GR (European Central Bank)
People
Anders Lumholtz (Danske Bank A/S)
Anders Moeller Lumholtz (Danske Bank A/s)
Antoine Bouvet (Mizuho Financial Group Inc)
Christoph Rieger (Commerzbank AG)
To de-activate this alert, click here
UUID: 7947283
(Bloomberg) -- Spain to sell 0.25% 01/2019, 4.80% 01/2024, 1.95% 07/2030 for EU2b-3b at 10:30am CET. Analysts are optimistic on the auction given reduced size, recent investor demand, strong carry and roll dynamics.
Alert: HALISTER1- Danske Bank (Anders Moller Lumholtz)
- 3Y benchmark to attract strong demand; first SPGB on the curve offering positive yield; does not look particularly attractive vs BTPs or in RV; small size suggest strong demand
- Issuance in 5Y segment has been limited recently; good domestic demand seen in this part of SPGB curve
- Continued ECB QE buying in 2024s has left market makers short, expect decent demand from these accounts; 8Y sector also offers attractive carry and roll
- 15Y bonds attractive on the curve vs Italy
- Mizuho (Antoine Bouvet)
- Limited auction size supportive factor for the taps; like 8Y sector of SPGB curve, auction should be easily absorbed
- Performance on 07/2030 has been strong, hinting at good demand from investors
- Recent EC decision to grant one more year to reach its deficit target supportive for Spain, investor focus remains on upcoming elections June
- Commerzbank (Christoph Rieger)
- Spain outperformed Italy ahead of SPGB auctions, versus now trading at the lower end of the range, further outperformance looks limited even after supply
Source: BFW (Bloomberg First Word)
Tickers
2539Z GR (European Central Bank)
People
Anders Lumholtz (Danske Bank A/S)
Anders Moeller Lumholtz (Danske Bank A/s)
Antoine Bouvet (Mizuho Financial Group Inc)
Christoph Rieger (Commerzbank AG)
To de-activate this alert, click here
UUID: 7947283