STIR: SFRZ6/Z8 Lifted

This morning, Germany will hold its second Schatz auction of the year. On offer will be E5bln of the new 2.20% Mar-27 Schatz.

• The size is a step up from the E4.5bln seen at the last Schatz auction in January; however, the size is consistent with recent Schatz launch auctions.
• Recent Schatz auctions have passed smoothly, with solid bid-to-covers (in a 2.19x to 2.61x range since August), bid-to-offers (1.69x to 2.17x range since August) and the low prices above the secondary market mid-prices throughout 2024.
• The amount allotted as a percentage of total offered in the 7 January auction was the lowest for a Schatz auction since November 2022 at around 77%, but we place little signal on this metric and it should not impact the outcome of today's auction.
• For the last Schatz auction on 7 January, the bid-to-cover stood at 2.34x, while the bid-to-offer came in at 1.81x.
• The political situation in Germany is characterized by some uncertainty at the moment amid snap elections being scheduled for February 23. However, the mainstream parties are expected to be able to form a functioning government as of now - so we don't expect an impact on today's Schatz auction from that.
• The next German auction will be tomorrow's E4.5bln of the 2.50% Feb-35 Bund (ISIN: DE000BU2Z049), while the 2.20% Mar-27 Schatz will be reopened next on February 18.
• Timing: Results will be available shortly after the bidding window closes at 10:30GMT / 11:30CET.

• The US Emini (ESH5) is breaking through the intraday high, a decent 1.96% recovery from Yesterday's low print.
• Most Investors will still be looking at the big opening gap from Yesterday, from 6102.14 back up to 6132.00, now trading at 6064.00.

• MNI: ECB Q4 ENTERPRISE CREDIT STANDARD +7
• MNI: ECB Q4 ENTERPRISE DEMAND +3
• MNI: ECB Q4 HOUSE PURCHASE STANDARDS +1
• MNI: ECB Q4 HOUSE PURCHASE DEMAND +42
• MNI: ECB Q4 CONSUMER CREDIT STANDARDS +6
• MNI: ECB Q4 CONSUMER CREDIT DEMAND +2