EU FINANCIALS: Banca Monte dei Paschi di: Q2 25 Results            

The EU is scheduled to hold a syndication this week with the Netherlands, Austria, Germany, Portugal and Italy looking to hold auctions. We pencil in estimated gross issuance for the week of E29.4bln, up from E25.3bln last week.

For the full MNI EGB Issuance, Redemption and Cash Flow Matrix with a look ahead to the next two weeks of issuance, an update on Q3 issuance plans and a recap of this week, click here.

• The EU will kick off its H2 issuance this week with an EU-bond syndication. We look for at least one new non-green issue. The EU has pointed to new issues in H2 being focused on 5/7/15/30-year segments. We note that there was a 5-year new issue in July last year (alongside a 30-year tap) so think a 5-year launch is relatively likely here. If it is part of a dual-tranche syndication, a 15-year launch since June last year (and that is now around terminal size) so we would favour that as the most likely. However, there is also a decent chance that we get 30-year, although our base case is that comes later in the year.
• Netherlands will come to the market tomorrow, looking to sell E1.75-2.25bln of the 3.25% Jan-44 Green DSL (ISIN: NL0015001RG8).
• Austria will also hold an RAGB auction tomorrow. On offer will be a combined E1.725bln of the on-the-run 10-year 2.95% Feb-35 RAGB (ISIN: AT0000A3HU25) and the 15-year 0% Oct-40 RAGB (ISIN: AT0000A2KQ43).
• Germany, also tomorrow, will hold a E5bln auction to launch the new Oct-30 Bobl ISIN (DE000BU25059) on offer. We note that in its recent Q3 issuance plan the DFA decided not to increase the size of any Bobl auctions. The coupon will be confirmed this morning.

• RES 4: 0.8781 2.236 pro of the Mar 3 - 11 - 28 price swing 
• RES 3: 0.8738 High Apr 11 high and a key resistance
• RES 2: 0.8694 High Apr 14 
• RES 1: 0.8670 High Jul 02
• PRICE: 0.8642 @ 06:43 BST Jul 7
• SUP 1: 0.8606 Low Jul 3 
• SUP 2: 0.8550/8503 20- and 50-day EMA values 
• SUP 3: 0.8459 Low Jun 11
• SUP 4: 0.8407 Low Jun 4

The trend condition in EURGBP is unchanged, it remains bullish and last week’s gains reinforce current conditions. Moving average studies are in a bull-mode position - highlighting a dominant uptrend. 0.8648, 76.4% of the Apr 11 - May 29 downleg, has been pierced. A continuation higher would open 0.8738, the Apr 11 high and a key resistance. Support to watch lies at 0.8541, the 20-day EMA.

• RES 4: 107.690 High Apr 30 
• RES 3: 107.610 High May 23 and a key near-term resistance
• RES 2: 107.430/475 High Jun 13 / High May 27
• RES 1: 107.365 Intraday high  
• PRICE: 107.340 @ 06:14 BST Jul 7
• SUP 1: 107.195/180 Low Jun 6 / 23    
• SUP 2: 107.125 Low May 12 and a key support
• SUP 3: 107.000 Round number support 
• SUP 4: 106.890 2.000 proj of the May 23 - 29 - 30 price swing

Schatz futures remain inside a range and price continues to trade below the Jun 13 high. Support to watch is 107.195, the Jun 6 low. It has been pierced, a clear break of it would reinstate a bearish threat and signal scope for an extension towards 107.125, the May 12 low. On the upside, clearance of 107.470, the May 30 high, is required to strengthen a bullish condition. Initial firm resistance is 107.430, the Jun 13 high.