SPAIN AUCTION PREVIEW: Digestion Of Supply An Important Gauge Of Broader Demand
Mar-06 09:14
Spain will hold a Bono/Obli and ObliEi auction this morning. On offer will be a shared E4.5-5.5bln of the 3.10% Jul-31 Obli (ISIN: ES0000012N43) alongside the on-the-run 10-year 3.15% Apr-35 Obli (ISIN: ES0000012O67). E250-750mln of the 0.70% Nov-33 Obli-Ei (ISIN: ES0000012C12) will also be on offer.
- The digestion at today’s Spanish (and French) conventional auctions will be an important barometer of broader EGB demand, given the volatility over the last two sessions (these are the first conventional auctions since the German fiscal announcement on Monday night).
- Yesterday’s 30-year German syndication saw books close in excess of E36bln, smaller than the E74bln and E46bln seen on the two 30-year syndications in 2024.
- On the one hand, the recent sell-off may provide an attractive entry point for Spanish paper. However, prospects for further volatility (particularly with the ECB decision this afternoon) could instead tempt some to remain on the sidelines for today’s auctions.
- This will be the first reopening of the 3.15% Apr-35 Obli following the syndicated launch on Jan 22 (in line with our expectations). The launch saw record order books in excess of E143bln for the E15bln issued.
- The 3.10% Jul-31 Obli has been re-opened 5 time since launching in July 2024. The bond has attracted an average bid-to-cover ratio of 1.98x for amounts issued of between E1.2-2.6bln (avg E1.865bln) across those 5 re-openings.
- The 0.70% Nov-33 Obli-Ei was last re-opened in November 2024.
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EGBS: Spreads Little Changed, OATs Benefit From Politics, BTPs Eye Syndication
Feb-04 08:54
Most EGB spreads are within 1bp of yesterday’s closing levels.
- A downtick in European equity indices counters tariff relief seen late Monday.
- BTP/Bunds just under 1bp wider at ~112bp, December closing lows at 106.4bp remain intact.
- OAT/Bunds ~0.5bp tighter at 71.5bp. OAT bulls are still unable to force a test of 70bp, with fiscal and political risks remaining evident over the medium term despite the socialist party noting that they will not support an upcoming censure motion against PM Bayrou (which triggered relief OAT tightening over the last 24 hours).
- RAGB supply presents the only conventional EGB auction today, although we remain on the lookout for syndications from Belgium, Germany and Italy (dependent upon market conditions).
- The potential for an Italian syndication may be weighing on BTPs.
EGB SYNDICATION: Croatia 12Y EUR Benchmark: IPT
Feb-04 08:52
- EUR Benchmark 12Y Fixed (Feb. 11, 2037) MS+120 Area
- Coupon: Annual, act/act ICMA
- Settlement: Feb. 11, 2025
- ISIN: XS2997390153
- Bookrunners: ERSTE, IMI - Intesa Sanpaolo, ING (B&D), JPM, MS
- Timing: May price today.
Details as per Bloomberg
USD: Paring some Overnight gains
Feb-04 08:50
- The Dollar is still paring some gains going int the European session, cross asset markets have stabilised somewhat, and the Swissy in back in the green vs the USD, albeit closer to flat.
- The USDJPY is slowly drifting back towards the 155.00 figure, but for now trades pretty much at today's mid 80 pips range, at 155.15.
