EUROZONE ISSUANCE: EGB Supply
Italy is scheduled to a conventional auction on Friday while Finland is due to hold an ORI auction tomorrow. Already this week, the EU, Belgium and Germany have held auctions while Slovenia held a syndication. We pencil in estimated gross issuance for the week of E29.2bln, a little lower than the E30.7bln last week.
- Finland will come to the market tomorrow to hold an ORI auction with up to E400mln on offer. Details are to be confirmed today.
- Italy will look to conclude issuance for the quarter on Friday with a 5/10-year BTP / CCTeu auction. On offer will be E1.25-1.5bln of the 5-year on-the-run 2.95% Jul-30 BTP (ISIN: IT0005637399) that was launched earlier this month via syndication alongside E1.25-1.5bln of the off-the-run 5-year 2.70% Oct-30 BTP (ISIN: IT0005654642). Also on offer will be E3.0-3.5bln of the on-the-run 10-year 3.60% Oct-35 BTP (ISIN: IT0005648149) and E1.5-2.0bln of the Apr-34 CCTeu (ISIN: IT0005652828) that was launched in last month’s auction.
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BTP TECHS: (M5) Remains Above The 50-Day EMA
- RES 4: 121.93 76.4% of the Dec 5 ‘24 - Mar 14 bear leg (cont)
- RES 3: 121.43 1.618 proj of the Mar 14 - Apr 4 - 9 price swing
- RES 2: 121.00 High Feb 7 (cont) and a key resistance
- RES 1: 120.72 High May 8 and the bull trigger
- PRICE: 120.23 @ Close May 23
- SUP 1: 119.29/00 50-day EMA / Low May 14
- SUP 2: 118.76/09 Low Apr 15 / 14
- SUP 3: 117.28 Low Apr 10
- SUP 4: 116.06 Low Apr 9
A bull cycle in BTP futures remains intact and recent weakness appears to have been a correction. Key support to watch lies at 119.29, the 50-day EMA. A clear break of the average would signal scope for a deeper retracement, and open 118.76 initially, the Apr 15 low. On the upside, key resistance and the bull trigger is at 120.72, the May 8 high. Clearance of this hurdle resumes the uptrend.
