EU REAL ESTATE: Digital Realty Trust: Dual Tranche Guidance

• EUR through to new daily lows in recent trade, with single currency pressed lower against both USD and GBP. EUR/GBP has edged through last Friday's lows, making 0.8675 initial support into 0.8656. No specific newsflow or headlines behind the fade, but French politics remains a key weight here, despite Macron's calls for stability and his appointment of a new cabinet over the weekend.
• We noted last week the fading resilience of GBP, which may remain the case even with today's dip in EUR/GBP. Into the MPC speeches and the run of UK data, GBP/USD is off last week's lows, but inside the Friday range. This leaves the 1.3262 low as key support this week, a break below which exposes the 200-dma of 1.3178 and levels last seen at the beginning of August. It remains difficult to see a protracted GBP/USD sell-off absent a move in the USD however, and with an October Fed rate cut fully priced, there may be limits on how much further the greenback can rally from here.
• Futures markets show the session's lighter volumes given the US celebrate Columbus Day, with EUR futures volumes near 20% below average for this time of day. Similarly for GBP, volumes are generally thin - particularly in contrast with Friday's busier session.
• GBP/JPY is more steady having reversed hard off the cycle high last week - further signalling that JPY is the dominant leg in the cross. Politics remains a key driver of the currency, with opposition parties set to meet tomorrow to discuss the collapse of the governing coalition last week. These meetings could help determine whether Takaichi goes ahead with a minority government, or looks to bring forward elections.

Tesoro Publico has announced it will be looking to sell a combined E4.0-5.0bln of the following Oblis at its auction this Thursday, October 16:

• the 1.25% Oct-30 Obli (ISIN: ES0000012G34)
• the 2.55% Oct-32 Obli (ISIN: ES0000012K61)
• the 3.20% Oct-35 Obli (ISIN: ES0000012P33)

Tesoro Publico has additionally announced it will be looking to sell a combined E2.0-3.0bln of the following letras at its auction tomorrow, October 14:

• the 3-month Dec 5, 2025 letras
• the 9-month Jul 10, 2026 letras
   

Late on Friday Goldman Sachs recommended going long the 0QZ5 97.25 calls at 8.0, targeting 16.0, with a stop set at 8.0 as a “tactical hedge against the risk that tariff concerns escalate”. The situation has obviously calmed a little over the weekend.