FRANCE AUCTION PREVIEW: On offer next week

Top of the E10-12bln range sold, with decent bid-to-cover ratios seen across lines. The majority of the sale was allocated to the on-the-run 3.20% May-35 OAT (E7.8bln)

• The lowest accepted prices were above pre-auction mid prices in all cases.
• Light upside in OAT futures seen following the publication of the results, now +15 ticks to fresh session highs of 125.00. 

Bunds fade the initial downtick that came alongside the RTRS headlines covering German defence spending increases, with similar moves seen in swap spreads.

• Markets have treated the news as being within the range of pre-existing estimates, although the story seems to point to a more front-loaded spending increase than many sell-side names expected.
• Bund futures respected prior session lows and swap spreads only experienced modest moves lower before retracing.

• MNI: EUROZONE MAR RETAIL SALES -0.1% M/M, +1.5% Y/Y