DAILY G7 BOND AUCTION PREVIEW: NOW AVAILABLE IN RESEARCH SECTION - Dutch EUR 2.5-3.5bln new 3-year 2018 DSL, Italian EUR 7bln 0.75% 2018, 2.15% 2021 and 3.50% 2030 BTP, German EUR 1bln 0.5% I/L 2030 Bond, US USD 21bln 10y Note Auction

13th JANUARY 2015                                                         

This week will see around EUR 20bln of supply from the Eurozone this week and thus a pick up from the recent holiday-thinned conditions. More specifically, the DSTA kick-off proceedings on Tuesday when they come to market with their first offering of the year, with Austria and Italy also holding auctions on the same day. These are then followed by the first Bund issuance of 2015 on Wednesday and Spain on Thursday. In terms of redemption flow, Thursday sees EUR 17.8bln from France and EUR 10.9bln from Netherlands. Finally, from a UK perspective, the DMO are due to hold a 2034 tap on Thursday.

EU   

AUCTION PREVIEW: Dutch EUR 2.5-3.5bln new 3-year 2018 DSL Auction (7K Mar’15 schatz future equiv.)

The Netherlands come to market today with a new 3y DSL which is expected to be well received and demand underpinned by a EUR 10.4bln in redemption due from the Netherlands on Thursday.

Although this is a new 3y from the Dutch treasury it can compared to the previous 3y DSL (0.5% 2017) which was auctioned in October 2014, sold at an avg. price of 101.21 and at an avg. yield of 0.015%. The bidding deadline is at 0900GMT and results seen shortly afterwards.

AUCTION PREVIEW: Italian EUR 7bln 0.75% 2018, 2.15% 2021 and 3.50% 2030 BTP Auctions

Italy come to market with BTPs for the first time this year, and with peripheral markets trading well ahead of today’s supply, and redemptions of ~EUR 26bln due this week, expectations are decent good demand at auction. The prospect of an announcement of QE from the ECB next week has been underpinning the recent rally in BTPs (particulary in the 2021 line) and although longer dated BTPs have underperformed their Spanish counterparts this means a concession is on offers for BTPs over Bonos.

In terms of historical data:

0.75% 2018 prev b/c 1.53 and average yield 0.770%.
2.15% 2021 prev b/c 1.51 and average yield 1.740%.
3.50% 2030 prev b/c 1.55 and average yield 2.970%.

Bids are submitted by 1000GMT and results are published shortly after.

AUCTION PREVIEW: Austrian EUR 1.1bln 0.25% 2019 and 1.65% 2024 RAGB Auctions

In terms of historical data:

0.25% 2019 prev b/c 2.51 and average yield 0.195%.
1.65% 2024 prev b/c 1.58 and average yield 0.825%.

Bids are submitted by 1000GMT and results are published shortly after.

AUCTION PREVIEW: ECB’s 8-Day MRO

The ECB last allotted EUR 112.33bln in 8-Day op MRO to 137 bidders, results are published after 1010GMT

AUCTION PREVIEW German EUR 1bln 0.5% I/L 2030 Bond Auction

Today the Bundesbank comes to market with their latest I/L offering, which was previously auctioned in November and saw, a b/c of 1.50 and real-yield of -0.120%. Bids are submitted by 1030GMT and results are published shortly after.

AUCTION PREVIEW: Belgian EUR 2.1bln 3-, & 12-Month T-Bill Auctions

The most recent 3-Month T-Bill auction was on 6th Jan 2015,  was covered 3.02 times and at an avg. yield of -0.103%. 12-Month T-Bills were last auctioned on 16th Dec 2014 with a bid/cover of 1.49 and average yield of -0.021%.

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

SYNDICATION: Portugal are expected to syndicate 10y and 30y bonds after mandating banks for a sale yesterday. The UK are also expected to syndicate a new 2% 2020 Gilt today

US

This week, the US Treasury will auction USD 59bln in 3- and 10-year notes and 30-year bonds. The make-up is slightly changed from last month with the Treasury announcing they will sell just USD 25bln in 3-year notes, compared with USD 26bln in November, and they will keep reducing size of 2- and 3-year auctions by USD 1bln this quarter as the stronger economy helps shrink the budget deficit. The size of the 10-year notes and 30-year bonds will remain the same as previous at USD 21bln and USD 13bln, respectively. There are no redemptions although on Monday the 15th there will be USD 33bln for reinvestment from a maturing 3-year. ​

AUCTION PREVIEW: US USD 21bln 10y Note Auction (236K Mar 10y futures equiv.)

Today the US Treasury is to sell USD 21bln in 10y notes and the results are expected a few minutes past 1800GMT (1200CST).

Looking at the historical data, the B/C at the last auction held was 2.97, dealers taking 39.4% of the issue and indirect bidders accounted for 53.8%. The auction prior to the last had a B/C of 2.52 and indirect bidders accounted for 44.7%.

The average of the past five auctions has seen a B/C of 2.71, indirects take 48.6%, and dealers taking 40.3% of the issue.

The past five auctions have been relatively uninspiring; the previous offering in December was average as although indirect bidders took a large chunk of the issuance, direct bidding fell and yield stopped broadly at the WI. Looking further back, November was fairly unremarkable with the B/C unchanged from the prior month and a slightly higher-than-average take-up by indirects, October’s offering saw the lowest B/C since August 2013, September saw buy-side demand below the 5-auction average, while August saw a small tail but strong demand.

13 Jan 2015 - 08:40- Fixed IncomeData- Source: RANsquawk