PARIS: The French treasury taps the on the run 3 year OAT (0% Feb2020), on the run 5 year OAT (0% May2022) and off the run OAT (2.25% Oct2022) for a combined €6-7B.
The bonds on offer cheapened slightly in ASW-spread terms going into the auction. The Feb2020 is rather cheap on the curve, the other OAT’s trade normal. We expect a decent auction as French election risk eased with Macron becoming the clear frontrunner.
The Spanish debt agency sells the on the run 5-yr Bono (0.4% Apr2022), on the run 30 year Obligation (2.9% Oct2046) and two off the run Obligations (1.3% Oct2026 & 5.15% Oct2028) for a combined €4-5B. Bonds on offer traded rather stable going into the auction. The Oct2026 and Oct2046 Obligations are expensive on the Spanish curve, while the Oct2028 bond is cheap.
