IRAN: Dep Foreign Min Confirms IAEA Talks In Coming Weeks

The EU plans to issue E70bln of NGEU and Macro Financial Assistance+ bonds in H2-25 (conventional and green). This is at the lower end of our rough E70-90bln estimated range. The EU had a E90bln target in H1, and we estimate had raised E85.8bln in nominal terms and E84.3bln in cash terms through its issuance operations in H1, so around E5bln under the target. The EU raised E64.2bln (nominal) / E63.5bln (cash) raised in H2-24.

• There are 4 confirmed syndication weeks in H2-25 (6 in H1-25, 4 in H2-24) and 6 planned auction dates (7 in H1-25, 6 in H2-24).
• “EU-Bonds will be issued using benchmark maturities from 3 to 30 years, with tap transactions and new lines, using auctions and syndications. The maturities for the new lines will depend on market conditions and the intention to bring liquidity to the curve where needed (with a preliminary focus on 5y, 7y, 15y and 30y)”.
• “EU-Bonds auctions will continue to be multi-bond auctions, including 3-leg auctions. In addition, the Commission will introduce (as of autumn 2025 – exact date to be confirmed) non-competitive auction allocations to EU Primary Dealers, allowing for the allocation of additional amounts of auctioned bonds (20 % of initially allocated auction volume) the day following the bond auction”.
• We noted that second rounds could have been introduced as soon as July, but the Commission have opted to start later this year (we suspect September/October).
• “NextGeneration EU Green Bond issuances will remain closely calibrated to reported green expenditure from Member States, financing the green component of the Recovery and Resilience Facility. Subject to the notification and validation of Member States’ expenditures, NGEU Green Bond issuances will take place via tapping of existing bonds to support the liquidity of these lines before launching a new line”.
• EU-bills will continue to be issued as triple-tranche auctions, with new 12-month lines issued during the first auction of the month.

• +32,000 TYQ5 113 calls, 21 ref 111-15.5/0.20, appr 6.68% vol (exp 7/25)

• The strong 1% bounce off the lows for cable is weighing on EURGBP, which sits 0.2% lower on the session. This price action is largely seen as corrective given the bullish theme which remains intact for the cross. The recent breach of the 50-day EMA highlighted a stronger reversal, signalling scope for a climb towards 0.8592 and 0.8624, the April 21 high. Initial support is at the 20-day EMA is at 0.8488.
• Having seen the rally in EURGBP lose some steam around 0.8550, ING still think the momentum can remain generally bullish on the pair, and expect a break above 0.860 in the near term. Above 0.8710, they would be looking back at 4Q23 levels on the chart, which look too elevated unless the BoE delivers an aggressive easing cycle from here.
• Goldman Sachs note EURGBP has overshot their GSBEER model implied estimates slightly over the past few weeks, which could pose a tactical headwind for another leg higher from here. While GS expect an eventual drift higher in EURGBP over the next year, they think we will likely continue to see choppy but range-bound moves in the cross over the coming months, around their three-month target of 0.85.
• It is a quieter week for data in the UK, placing the focus on the plethora of BOE speakers scheduled.