EUROZONE ISSUANCE: EGB Supply
For a recap on this week's issuance and a look ahead to next week see the PDF here
Spain and France look to hold auctions today, while Germany and Austria have already held auctions this week. We pencil in issuance of E24.7bln, up from E17.2bln last week.
- Spain will come to the market today to hold a Bono/Obli/ObliEi auction. On offer will be a combined E4.0-5.0bln of nominals: the on-the-run 3-year 2.40% May-28 Bono (ISIN: ES0000012O59), the on-the-run 10-year 3.20% Oct-35 Obli (ISIN: ES0000012P33) and the short 20-year 3.45% Jul-43 Obli (ISIN: ES0000012K95) alongside E250-750mln of the 1.00% Nov-30 Obli-Ei (ISIN: ES00000127C8).
- As we also expected in last week’s announcement, the auction scheduled for 21 August was cancelled (in line with precedent in recent years).
- France will conclude issuance for the week, also today by holding a LT OAT auction for E8.5-10.5bln. This is a slightly smaller auction than the E10-12bln range we have seen recently (expected, given that it is August) but what is perhaps a bit less expected is that all of the OATs on offer are off-the-run issues: the 1.25% May-34 OAT (ISIN: FR0013313582), the 1.25% May-36 OAT (ISIN: FR0013154044), the 0.50% May-40 OAT (ISIN: FR0013515806) and the 4.00% Apr-55 OAT (ISIN: FR0010171975).
NOMINAL FLOWS: This week sees E0.7bln of redemptions, of which E0.6bln is from a formerly 3-year LithGB, while coupon payments total just E0.2bln. This leaves estimated net flows for the week at positive E23.7bln, versus negative E26.2bln last week.
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EUROZONE T-BILL ISSUANCE: W/C 7 July
Spain, Belgium and Italy are still due to sell bills this week, while Germany, the Netherlands and France have already come to the market. We expect issuance to be E27.0bln in first round operations, up from E20.6bln last week.
- This morning, Spain will look to sell a combined E2-3bln of the 3-month Oct 10, 2025 letras and the 9-month Apr 10, 2026 letras
- Also today, Belgium will look to issue E2.6-3.0bln of TCs: An indicative E1.0bln of the 3-month Oct 16, 2025 TC and an indicative E1.8bln of the new 12-month Jul 9, 2026 TC.
- Finally on Thursday, Italy will look to hold a BOT auction with E7.5bln of the new 12-month Jul 14, 2026 BOT on offer.
SCHATZ TECHS: (U5) Monitoring Support
- RES 4: 107.690 High Apr 30
- RES 3: 107.610 High May 23 and a key near-term resistance
- RES 2: 107.430/475 High Jun 13 / High May 27
- RES 1: 107.365 High Jul 7
- PRICE: 107.260 @ 06:24 BST Jul 8
- SUP 1: 107.195/180 Low Jun 6 / 23
- SUP 2: 107.125 Low May 12 and a key support
- SUP 3: 107.000 Round number support
- SUP 4: 106.890 2.000 proj of the May 23 - 29 - 30 price swing
Schatz futures remain inside a range and price continues to trade below the Jun 13 high. Support to watch is 107.195, the Jun 6 low. It has been pierced, a clear break of it would reinstate a bearish threat and signal scope for an extension towards 107.125, the May 12 low. On the upside, clearance of 107.470, the May 30 high, is required to strengthen a bullish condition. Initial firm resistance is 107.430, the Jun 13 high.
JPY: FX Exchange traded Option
Early FX Exchange traded Option, New Position, looking for Yen strength:
- JPYUSD (8th Aug) 63.00p, sold at 0.25 in 1.5k.
