News Headline Summary

DAILY G7 BOND AUCTION PREVIEW: NOW AVAILABLE IN RESEARCH SECTION - Greek EUR 875mln 6-Month T-Bill Auction, UK GBP 4bln 2% 2020 Gilt Auction (22.8K Sep'14 Gilt equiv)

2nd SEPTEMBER 2014                                                     

This week supply from the Eurozone begins to pick up again with almost EUR 18bln to be auctioned in total from Germany, France and Spain. Germany comes to market with EUR 5bln Bobl on Wednesday as German yields trade at record lows with both the 2- and 3-year yields negative. This is then followed up with Spanish and French auctions on Thursday. France is to sell approximately EUR 8.5bln in longer dated paper with Spain due to tap its Oct’24 and Oct’44 Bonos. The Spanish treasury will be announcing the size of these on Monday with expectations of approximately EUR 4bln. However there are also modest coupon payments out of Europe with almost EUR 8bln of coupon payments from Italy and Netherlands for reinvestment on Monday, and EUR 1bln of coupon payments from Germany and Belgium on Thursday.

AUCTION PREVIEW: Greek EUR 875mln 6-Month T-Bill Auction

The most recent 6-Month T-Bill offering by the Greek PDMA was covered 3.03 times and at an avg. yield of 2.02%. Bids are submitted by 1000BST and results are published shortly after. Results are usually published after 1015BST.


The ECB last allotted EUR 131.88bln in 7-Day op MRO to 135 bidders. The central bank is expected to allot EUR 113.5bln in today's 7-Day MRO (low expectation of EUR 100.0bln and high expectation of EUR 132.0bln).

AUCTION PREVIEW: UK GBP 4bln 2% 2020 Gilt Auction (22.8K Sep'14 Gilt equiv)

Today sees the offering of the DMO’s new July 2020 Gilt with expectations of a relatively straightforward sale despite the recent climb higher in UK Gilts. Today’s issuance is relatively cheap on the UK curve and offers some modest relative value compared to the September 3.75% 2020 Gilt.

In terms of historical data, the previous 2020 bond was issued back in February 2011 with a b/c of 2.06 and 0.3bps tail, although this bond was offered with a 3.75% coupon.

Bids are submitted by 1030BST and results are published shortly after.

AUCTION PREVIEW: Belgian EUR 2.5bln 3- and 12-Month T-Bill Auctions

The most recent 3-Month T-Bill offering was covered 2.39 times and at an avg. yield of -0.036%. The 12-Month offering was last covered 1.74 times and at an avg. yield of 0.0099%. Bids are submitted by 1030BST and results are published shortly after.


Note, at 1530 BST there is the announcement of the size of a re-opening of the new conventional gilt maturing on 22 January 2045 and 0.125% Index-linked Treasury Gilt 2052

2nd SEPTEMBER 2014                                                     

There are no scheduled auctions out of the US this week however on Thursday the Treasury will announce the size of next week’s 3-, 10- and 30-year notes and bonds. The size of all three auctions are expected to be unchanged at USD 27bln for the 3y, USD 24bln for the 10y and USD 16bln for the 30y. The 3-year auction is expected to be kept at USD 27bln as the US Treasury have stopped reducing the size of the shorter dated auctions that was seen in Q2. As the Fed continues to taper asset purchases, the number of outright purchase operations remains small with just two operations next week, one in the 20-30 year bracket and one in the 4-4.75 year bracket for a total size of approximately USD 2.6bln.

No scheduled US auctions

02 Sep 2014 - 08:22 - Fixed Income Geopolitical - Source: RANsquawk

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