AUDUSD TECHS: Approaching An Important Resistance Zone

• On Thursday, Italy will hold a 3/7 and 15-50-year BTP auction. On offer will be E3.5-4.0bln of the new 3-year 2.65% Jun-28 BTP (ISIN: IT0005641029) while in the 7-year area E1.25-1.50bln of the 4.00% Oct-31 BTP Green (ISIN: IT0005542359) will be sold alongside E0.75-1.25bln of the off-the-run 8-year 2.45% Sep-33 BTP (ISIN: IT0005240350). Alongside these E1.25-1.5bln of the on-the-run 30-year 4.30% Oct-54 BTP (ISIN: IT0005611741) will be on offer.
  • We had thought that a 7-year BTP launch was more likely than a 3-year launch here (albeit we hadn’t ruled out the new 3-year issue). With the current on-the-run 7-year 3.15% Nov-31 BTP not being on offer this week, we think that the probability of a new 7-year BTP being part of a dual-tranche syndication (potentially alongside a 30-year BTPei issue) have increased in the coming weeks.

The EU will hold its scheduled syndication today, whilst Germany, Portugal and Italy are all due to hold auctions this week. We look for estimated gross issuance for the week of E26.6bln, down from E47.3bln (ex-retail operations) last week.

For the full document including more details on issuance this week and next week click here.

• The EU announced a mandate for a new 10-year EU-bond maturing 12th December 2035. The transaction will be launched today, subject to market conditions.
  • Note that the last 10-year EU-bond launch at syndication (Feb 2024) saw E7bln sold. We see upside risks to this and pencil in E7-10bln (although think it's likely we see the bottom half of this range).
• Also today, Germany will sell E4.5bln of the 2.20% Mar-27 Schatz (ISIN: DE000BU22080).
• Tomorrow, Germany will return to the market to issue E4.5bln of the 10-year 2.50% Feb-35 Bund (ISIN: DE000BU2Z049).
• Also tomorrow, Portugal will hold an OT auction for a combined E1.00-1.25bln. On offer will be the first reopening of the recently launched on-the-run 10-year 3.00% Jun-35 OT (ISIN: PTOTEAOE0005) alongside the 3.50% Jun-38 OT (ISIN: PTOTEZOE0014).

Spain, Belgium, Finland and Italy are due to sell bills this week, whilst France already came to the market yesterday. We expect issuance to be E24.1bln in first round operations, down from E26.7bln last week. 

• This morning, Spain will come to the market to sell a combined E2-3bln of the 3-month Jun 6, 2025 letras and the 9-month Dec 5, 2025 letras.
• Also today, Belgium will issue a combined E2.4-2.8bln of TCs: An indicative E0.8bln of the 4-month Jul 10, 2025 TC and an indicative E1.8bln of the new 12-month Mar 12, 2026 TC will be on offer.
• Finally today, Finland will look to sell up to a combined E2bln of the 8-month Nov 13, 2025 RFTB and the new 11-month Feb 13, 2026 RFTB.
• To conclude issuance for the week tomorrow, Italy will sell the new 12-month Mar 13, 2026 BOT with E9.0bln on offer.