EURGBP TECHS: Bounce Considered Corrective

• Italy will then look to hold a BTP Short Term / BTPei auction on Wednesday with E2.0-2.5bln of the on-the-run 2.20% Feb-28 BTP Short Term (ISIN: IT0005692410) and E1.50-1.75bln of the 2.40% May-39 BTPei (ISIN: IT0005547812) on offer.
• Germany will return to the market on Wednesday to hold a LT Bund auction with E1bln of the 4.00% Jan-37 Bund (ISIN: DE0001135275) on offer alongside E1bln of the 3.40% May-47 Bund (ISIN: DE000BU2T000).
• Italy will return to the market on Friday with a 5/10-year BTP / CCTeu auction. Details will be confirmed on Tuesday 23 June. We expect the 5-year 3.15% Jun-31 BTP (ISIN: IT0005707614), the 10-year 3.80% Jul-36 BTP (ISIN: IT0005706285) and the Apr-36 CCTeu (ISIN: IT0005707689) to all be on offer, possibly alongside another CCTeu issue. There is an outside chance that a new 10-year BTP is launched at this auction, but we think that is much more likely at the July auction.

NOMINAL FLOWS: The upcoming week will see a single redemption: E14.3bln from a formerly 10-year Belgian OLO. Coupon payments for the week total E8.0bln of which E5.9bln are Italian, E1.7bln French and E0.3bln Austrian. This leaves estimated net flows for the week at positive E6.1bln, similar to this week’s positive E5.8bln ex-retail.

See the full document here for the full MNI EGB Issuance, Redemption and Cash Flow Matrix with a look ahead to the next two weeks of issuance, a recap of this week's issuance and a look ahead of Q3 / H2 issuance plans.

The EU, the Netherlands, Germany and Italy will all look to hold auctions in the upcoming week. We look for gross issuance of E28.5bln for the week, down from E29.4bln ex-retail this week.

• The EU will kick off auction issuance for the week on Monday with its final auction of H1, with up to E2.5bln of the 3.125% Dec-28 EU-bond (ISIN: EU000A3K4EN5), up to E3bln of the 3.25% Dec-36 EU-bond (ISIN: EU000A4ERVC2) and up to E1.5bln of the 1.25% Feb-43 Green EU-bond (ISIN: EU000A3K4DG1) on offer.
• The Netherlands will come to the market on Tuesday with E1.0-2.0bln of the on-the-run 30-year 3.50% Jan-56 DSL (ISIN: NL0015002P70) on offer.
• Germany will look to hold its first auction of the week on Tuesday with E5bln of the 2.50% Jun-28 Schatz (ISIN: DE000BU22130) on offer.

• RES 4: 1.3574 76.4% retracement of the May 1 - 18 bear leg     
• RES 3: 1.3522 61.8% retracement of the May 1 - 18 bear leg
• RES 2: 1.3480/1.3509 61.8% of the May 1 - 18 bear leg/ High May 26
• RES 1: 1.3441 50-day EMA
• PRICE: 1.3223 @ 16:49 BST Jun 19
• SUP 1: 1.3163 Low Jun 19
• SUP 2: 1.3159 Low Mar 31 and a key support
• SUP 3: 1.3079 2.0% 10-dma envelope
• SUP 4: 1.3010 Low Nov’25

GBPUSD broke lower again in Friday trade, resulting in a new pullback low of 1.3163. This keeps prices well through the bear trigger of 1.3303 as well as support into 1.3277. Longer-term downside targets rest at 1.3010 - the Nov’25 low. Resistance to watch in GBPUSD is around the 50-day EMA, at 1.3441. It has been pierced. A clear break of it would signal scope for a continuation higher towards 1.3509, the May 26 high.