GERMAN AUCTION PREVIEW: On offer next week

The 0.3bp tail is tighter than the two previous re-openings of the 4.00% Oct-63 Gilt (0.6bps in Feb 2024, 1.3bps in June 2024. 

• Meanwhile, the lowest accepted price of 81.799 exceeded the 81.779 pre-auction mid-price. The price of the Gilt has since moved up to 81.870 at typing.
• The bid-to-cover of 2.80x was a little below the 2.92x and 3.10x seen at the prior two re-openings. 

The German ZEW expectations index rose to 26.0 in February, outperforming a consensus estimate of 20.0, and January's 10.3, indicating some strengthening in sentiment amongst German financial market professionals. The current situation index meanwhile also improved further from December's multi-year low, to -88.5, stronger than consensus of -89.4.

• A wider update to German sentiment will follow on Friday with the February flash PMIs, and the IFO Business Climate index is scheduled for next Monday.
• The ZEW index is based on a survey of "experts from banks, insurance companies and financial departments of selected corporations [which] have been interviewed about their assessments and forecasts for important international financial market data" - so the index can exhibit elevated levels of correlation with German stock indices such as the DAX.