EUROZONE ISSUANCE: EGB Supply
Spain, France and Finland are all due to issue and Portugal is due to hold a buyback today, while Germany and Italy have already come to the market this week. We pencil in gross nominal issuance of E16.8bln, up from E14.9bln last week.
- Spain will look to come to the market this morning to hold its final Obli/ObliEi auction of 2023. In line with recent years, Spain has limited duration in its December auction to around 15-years, while the auction is also a smaller size with a combined E2.5-3.5bln of nominals: the 0.60% Oct-29 Obli (ISIN: ES0000012F43) and the on-the-run 15-year 3.90% Jul-39 Obli (ISIN: ES0000012L60). A further E250-750mln of the 0.70% Nov-33 Obli-Ei (ISIN: ES0000012C12) will be on offer.
- France will also come to the market this morning to hold its last auction of the year with a combined E4-5bln of nominals and linkers on offer: the 2.75% Oct-27 OAT (ISIN: FR0011317783), the 0% May-32 OAT (ISIN: FR0014007L00), the 1.25% May-34 OAT (ISIN: FR0013313582) and the 0.10% Mar-29 OATei (ISIN: FR0013410552).
- Finland will look to conclude its 2023 issuance today by holding an ORI operation with up to E300mln of the 0.125% Sep-31 RFGB (ISIN: FI4000507231) on offer.
- Portugal has also announced that it will hold a buyback auction this morning for the 5.125% Oct-24 USD bond (ISIN: XS1085735899 / XS1085738729).
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EUROZONE ISSUANCE: EGB Supply
Austria, Germany and Italy are all due to issue this week. We pencil in gross nominal issuance of E14.8bln, down from E31.0bln last week.
- Austria will kick off issuance for the week this morning with an RAGB auction. On offer will be a combined E1.265bln of the 5-year 0% Oct-28 RAGB (ISIN: AT0000A2VB47) and the on-the-run 2.90% Feb-33 RAGB (ISIN: AT0000A324S8). This is likely to be the last Austrian auction of 2023 and follows the triple-tranche syndication of 19 October.
- Tomorrow, Germany will come to the market to sell E4bln of the 10-year 2.60% Aug-33 Bund (ISIN: DE000BU2Z015).
- Italy will look to conclude issuance for the week on Friday with a 3/7/15-50-year BTP auction. We expect reopenings of both the 3-year on-the-run 3.85% Sep-26 BTP (ISIN: IT0005556011) and the 7-year on-the-run 4.00% Nov-30 BTP (ISIN: IT0005561888). We have less conviction on the 15-50-year BTP on offer. The bonds on offer will be announced late this afternoon.
NET NOMINAL FLOWS: This week sees redemptions of E3.5bln from a formerly 7-year EU-bond and coupon payments for the week of E0.3bln. This leaves net flows for the week an estimated positive E11.0bln versus negative E15.5bln last week.
BTP TECHS: (Z3) Has Cleared Resistance
- RES 4: 115.56 High Aug 24
- RES 3: 114.01 High Sep 8
- RES 2: 113.69 76.4% retracement of the Aug 24 - Oct 4 bear leg
- RES 1: 112.76 High Nov 2
- PRICE: 111.52 @ Close Nov 6
- SUP 1: 110.88/110.23- and 20-day EMA values
- SUP 2: 108.01/107.42 Low Oct 26 / 19
- SUP 3: 107.08 2.236 proj of the Jun 26 - Jul 11 - 19 price swing (cont)
- SUP 4: 106.40 2.382 proj of the Jun 26 - Jul 11 - 19 price swing (cont)
BTP futures traded higher last week and a short-term corrective bull cycle remains in play - for now. The contract has breached resistance at 111.17, the Oct 12 high. This has strengthened current conditions and exposes 113.69, a Fibonacci retracement point. On the downside, initial firm support lies at 110.23, the 20-day EMA, where a break is required to signal a possible reversal. This would reinstate the recent bearish theme.
MNI: SWISS OCT UNEMPLOYMENT +3% M/M, +4.4% Y/Y
- MNI: SWISS OCT UNEMPLOYMENT +3% M/M, +4.4% Y/Y
- SWISS OCT UNEMPLOYMENT RATE +2.1%
