USDCAD TECHS: Bear Leg Extends

• RES 4: 5858.59 1.618 proj of the Aug 1 - 22 - Sep 2 price swing   
• RES 3: 5825.00 High Nov 13 and the bull trigger
• RES 2: 5744.00 High Nov 14  
• RES 1: 5633.27 20-day EMA       
• PRICE: 5560.00 @ 06:41 GMT Nov 24
• SUP 1: 5475.00 Low Nov 21    
• SUP 2: 5427.01 61.8% retracement of the Aug 1 - Nov 13 bull cycle  
• SUP 3: 5383.00 Low Sep 18 
• SUP 4: 5366.00 Low Sep 17      

Last week’s sell-off in EUROSTOXX 50 futures highlights a stronger corrective cycle. The contract has breached two key support points; 5597.64, the 50-day EMA, and 5626.50, the base of a bull channel drawn from the Aug 1 low. The breach signals scope for a deeper pullback and opens 5427.01, a Fibonacci retracement. Initial firm resistance to watch is 5633.27, the 20-day EMA.

• Germany will return to the market on Wednesday with E3bln of the 10-year 2.60% Aug-35 Bund (ISIN: DE000BU2Z056).
• Finland will look to hold an ORI auction on Wednesday.
• Italy will look to conclude issuance for the week on Thursday with a 5/10-year BTP / CCTeu auction, with details to be confirmed this afternoon. We expect to see the on-the-run 5-year 2.85% Feb-31 BTP (ISIN: IT0005671273) and the on-the-run 10-year 3.45% Feb-36 BTP (ISIN: IT0005676504) on offer. We don’t have a strong view regarding the CCTeu that will be on offer.
  • As with the BTP Short Term / BTPei scheduled for the end of the year to be cancelled and expect this to be the last 5/10-year BTP / CCTeu of the year.

NOMINAL FLOWS: This week will see redemptions of E35.3bln, from a formerly 10-year OAT. Coupon payments for the week total E6.0bln of which E5.7bln are French and E0.2bln Italian. This leaves estimated net flows for the week at negative E19.1bln down from a negative 3.4bln last week.

The Netherlands, Italy, Germany and Finland will all look to come to the market this week. We pencil in issuance of E22.1bln for the week, down from E24.8bln last week.

See the full document here for a look ahead to the next two weeks of issuance and a recap of last week.

• The Netherlands will kick off issuance for the week tomorrow with E1.0-2.0bln of the on-the-run 30-year 3.50% Jan-56 DSL (ISIN: NL0015002P70) on offer via auction. This will be the first reopening of the DSL since its launch via DDA in September.
• Italy will hold a BTP Short Term /BTPei auction tomorrow. On offer will be E1.5-2.0bln of the on-the-run 2.10% Aug-27 BTP Short Term (ISIN: IT0005657330), E0.75-1.00bln of the 1.10% Aug-31 BTPei (ISIN: IT0005657348) and E1.25-1.50bln of the 2.40% May-39 BTPei (ISIN: IT0005547812).
  • We expect this will be the final BTP Short Term / BTPei auction of 2025 with the auction scheduled for 29 December likely to be cancelled.
• Germany will come to the market tomorrow with E4bln of the 2.20% Oct-30 Bobl (ISIN: DE000BU25059) on offer.