EUROZONE ISSUANCE: EGB Supply
Germany, Italy and Belgium all still look to issue this week while the EU and Germany have already come to the market. We pencil in gross nominal issuance of E21.2bln, up from E15.4bln last week.
- This morning, Italy will hold a 5/10-year BTP / CCTeu auction for up to E10bln (including the launch of a new 10-year BTP). On off will be E2.75-3.25bln of the on-the-run 5-year 3.80% Aug-28 BTP (ISIN: IT0005548315), E1.0-1.5bln of the previous on-the-run 10-year 4.35% Nov-33 BTP (ISIN: IT0005544082), E3.25-3.75bln of the new 10-year 4.20% Mar-34 BTP (ISIN: IT0005560948) and E1.0-1.5bln of the 1.15% Oct-31 CCTeu (ISIN: IT0005554982).
- Also this morning, Germany will look to sell E1.5bln of the 1.30% Oct-27 Green Bobl (ISIN: DE0001030740) which has a residual maturity of just over four years.
- On Friday, Belgium will look to conclude issuance for the week with an ORI operation. We pencil in an operation size of up to E500mln with details due to be announced tomorrow.
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EUROZONE ISSUANCE: EGB Supply: W/C 31 July, 2023 (2/2)
- On Friday, Belgium will hold an ORI operation. We look for the usual up to E500mln size with off-the-run OLOs likely to be on offer.
NET NOMINAL FLOWS: The week ahead sees large redemptions totalling E45.7bln, split between E21.2bln from a formerly 5-year Spanish Bono, E20.5bln from an originally 15-year BTP and E4.0bln of an originally 5-year ESM-bond. Coupon payments for the week total E13.9bln, of which E9.4bln are Austrian and E4.4bln Italian. This leaves net flows for the week at an estimated negative E41.6bln, more negative than the negative E8.4bln this week.
EUROSTOXX50 TECHS: (U3) Bullish Price Action
- RES 4: 4546.00 1.00 proj of the Jul 7 - 13 - 26 price swing
- RES 3: 4515.00 High Nov / Dec 2007
- RES 2: 4501.60 1.618 proj of the May 31 - Jun 5 - 7 price swing
- RES 1: 4498.00 High Jul 28
- PRICE: 4479.00 @ 06:32 BST Jul 31
- SUP 1: 4396.50 20-day EMA
- SUP 2: 4363.90/4331.00 50-day EMA / Low Jul 26 and key support
- SUP 3: 4282.00 Low Jul 11
- SUP 4: 4220.00 Low Jul 7 and a reversal trigger
Eurostoxx 50 futures rallied late last week. This resulted in a break of key resistance at 4447.00, the Jul 3 high and a bull trigger. The rally has confirmed a resumption of the uptrend and marked the end of a broad sideways move that started May 19. Attention is on 4501.60 next, a Fibonacci projection. Key short-term support has been defined at 4331.00, the Jul 26 low. A break of this level would be a bearish development.
EUROZONE ISSUANCE: EGB Supply: W/C 31 July, 2023 (1/2)
Germany, Spain, France and Belgium all look to issue this week. We pencil in gross nominal issuance of E18.0bln, down from E24.0bln last week.
- Germany will kick off issuance for both the week and August on Wednesday, selling 15-year Bunds: E750mln of the previous benchmark, the 0% May-36 Bund (ISIN: DE0001102549), will be on offer alongside E1.25bln of the on-the-run 1.00% May-38 Bund (ISIN: DE0001102598).
- On Thursday, Spain will look to hold an Obli/ObliEi auction. On offer will be the 1.50% Apr-27 Obli (ISIN: ES00000128P8), the 0.60% Oct-29 Obli (ISIN: ES0000012F43) and the on-the-run 10-year 3.55% Oct-33 Obli (ISIN: ES0000012L78) alongside the 0.65% Nov-27 Obli-Ei (ISIN: ES00000128S2). We pencil in a E5-6bln auction size (to be announced this afternoon), although wouldn’t rule out either slightly larger in line with recent auctions, or slightly smaller as we move into August.
- Also Thursday, France will come to the market to hold a LT OAT auction. As we expected, the auction size of E8-9bln is a bit smaller than we have seen recently (France typically reduces its auction sizes in August), although it’s not as much of a reduction as has been seen in other years. On offer will be the on-the-run 10-year 3.00% May-33 OAT (ISIN: FR001400H7V7), the on-the-run 15-year 1.25% May-38 OAT (ISIN: FR0014009O62) and the 37-year 4.00% Apr-60 OAT (ISIN: FR0010870956).
