Newsquawk Daily Bond Auction Preview - 20th August 2026

France to sell EUR 10.5-12.5bln 2.40% 2029, 2.70% 2031, 3.25% 2032 and 3.00% 2034 OAT Analysis: Currently, the 10yr yield trades at 4.11%. Yield curves globally have been steepening in recent days. With the short-end stabilising with fewer hikes being priced in globally, steepening has been primarily driven by the longer end. Persisting inflationary pressures, increased government spending and shifting investor demographics are hitting bonds globally. Locally, politics is not helping either. Ahead of the 2027 presidential election, investors are turning more bearish on French debt. According to Bloomberg data, bond futures data suggest investors have been placing new short positions in the 10-yr OAT. Additionally, Barclays strategists say bearish bets have seemingly picked up through the summer. Outside of the election, PM Lecornu will have to prepare a 2027 budget aimed at bringing the deficit below 5%. It doesn't help that the government is very divided. The political risk premium has widened the FR-GE 10yr spread to 85bps. Recent History: 2.40% 2029: b/c 2.70x & average yield 3.04% 2.70% 2031: No recent history 3.25% 2032: b/c 2.64x & average yield 3.35% 3.00% 2034: b/c 2.71x & average yield 3.45% Results due shortly after the 09:50BST bidding deadline