Monday, 19 November 2012

Linker Bobl Reopening Is A Surprise -Barclays


Barclays says linker Bobl reopening is a surprise given recent breakeven weakness. "The supply likely comes as a surprise to most market participants given that Germany had already reached the lower end of its EUR8B-EUR12B annual issuance target, and as linkers have lagged notably versus nominals since the last German linker auction on Oct 9," says Barclays. Germany will Wednesday auction EUR1B of the 0.75% April 2018-dated inflation-linked Bobl. Despite being unanticipated, Barclays does not expect the supply to be difficult for the market to absorb given its small size, particularly allowing for Germany having retained an average of a quarter of its linker supply auctioned this year.

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