EUROZONE ISSUANCE: EGB Supply
Italy and Ireland both look to come to the market on Thursday while the EU, Austria, Germany, Portugal. We pencil in gross nominal issuance of E16.3bln for the week (excluding retail funds from the BTP Italia), down from last week’s E35.8bln.
- Italy is issuing a new 5-year Mar-28 BTP Italia this week. The second phase for institutional investors will be open from 10:00CET to 12:00CET on Thursday, with the ISIN IT0005532723. The annual real coupon will be announced ahead of the placement and has been set at a guaranteed minimum 2.00% with retail investors who hold to maturity to also receive a bonus of 0.8%. The first phase of the placement took place Mon-Wed for retail investors with an ISIN IT0005532715 and saw a takeup of E8.563bln (day 1 E3.637bln, day 2 E2.933bln and day 3 E1.993bln).
- Ireland will look to round off Eurozone issuance for the week this morning with its first auction of 2023. It looks to sell a combined E1.00-1.25bln of the 10-year the 0.35% Oct-32 IGB (ISIN: IE00BMD03L28) and the 15-year 1.70% May-37 IGB (ISIN: IE00BV8C9B83).
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EUROZONE ISSUANCE: MNI EGB Supply - W/C February 6, 2023
The Netherlands, Austria, Germany and Portugal are the only countries with auctions in the calendar for this week. However, we expect a pickup in syndications this week a French transaction already confirmed and potential transactions from Belgium, Italy and Spain also due. If we were to see all of these deals we could see gross issuance as high as E34.4bln, with scheduled auctions making up E13.4bln. Either way, we would look for gross nominal issuance of less than last week’s E47.5bln.
- France will come to the market in the “near future” to launch its new 30-year May-54 OAT via syndication. The MNI Markets team expects the transaction to take place today and we pencil in a transaction size of E5.0bln.
- Also today, the Netherlands will launch its new 10-year 2.50% Jul-33 DSL (ISIN: NL0015001AM2) via DDA for E4-6bln. We expect strong demand with the top of the target range achieved. The preliminary initial spread guidance is set at the 2.30% Feb-33 Bund +32 to 35bp.
- Austria will hold a larger-than-usual auction of E1.725bln. On offer will be the 10-year 2.90% Feb-33 RAGB (ISIN: AT0000A324S8) that was launched via syndication last month as well as the 0% Oct-40 RAGB (ISIN: AT0000A2KQ43).
- Finally today, Germany will look to sell linkers: E500mln of the 0.10% Apr-26 ILB (ISIN: DE0001030567) and E200mln of the 0.10% Apr-46 ILB (ISIN: DE0001030575) will be on offer.
EURJPY TECHS: Testing Resistance
- RES 4: 145.83 High Dec 20
- RES 3: 144.53 76.4% retracement of the Dec 15 - Jan 3 bear leg
- RES 2: 144.00 Round number resistance
- RES 1: 142.99 High Feb 6
- PRICE: 141.96 @ 06:45 GMT Feb 7
- SUP 1: 141.19 20-day EMA
- SUP 2: 139.94/06 Low Feb 3 and a key support / Low Jan 20
- SUP 3: 137.39 Low Jan 3 and the bear trigger
- SUP 4: 137.92 Low Jan 19
EURJPY traded higher Monday and pierced resistance at 142.86, the Jan 11 high and a key resistance. A clear break of this hurdle would strengthen bullish conditions and highlight a stronger reversal plus confirm a recent bull flag on the daily chart. This would open 144.53, a Fibonacci retracement. On the downside, initial firm support has been defined at 139.94, the Feb 3 low. A break would be bearish.
MNI: SWISS JAN UNEMPLOYMENT +4% M/M, -17.6% Y/Y
- MNI: SWISS JAN UNEMPLOYMENT +4% M/M, -17.6% Y/Y
- SWISS JAN UNEMPLOYMENT RATE +1.9%
