EUROZONE ISSUANCE: EGB Supply
Belgium is due to hold an ORI operation today. France, Slovakia, the Netherlands, Germany and Italy have all to the market already (in addition to retail operations). We pencil in estimated gross issuance (ex-retail) for the week at E25.6bln, down from E30.0bln last week. We also note the huge redemptions and coupon payments.
- Today, Belgium will come to the market to hold an ORI operation for a combined up to E500mln. On offer will be the 1.00% Jun-31 OLO (ISIN: BE0000335449) and the 1.45% Jun-37 OLO (ISIN: BE0000344532).
- Italy is due to launch a new retail-only 6-year Mar-30 BTP Valore (ISIN: IT0005583478) this week. Books opened on Monday and already stand at E16.94bln sold across the first 4 days (E6.44bln sold on day 1, E4.611bln sold on day 2, E3.603bln on day 3 and E2.29bln sold on day 4; similar to the E17.07bln across the first three days for the 4-year in June and in excess of the E15.62bln seen for the 5-year in October). Books are due to close at 13:00CET today.
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EUROZONE ISSUANCE: EGB Supply
Germany and Italy look to return to the market today while Spain and France look to come to the market later this week and Greece has already a syndication. We also see potential for other syndications this week (particularly Belgian or Italian). We pencil in estimated gross issuance for the week at E56.7bln, up from E22.2bln last week, but with the return of higher redemptions and coupons.
- Italy has announced a mandate for a new long 15-year Oct-39 BTP. Our base case had been that we would see the next Italian syndication next week or the following week (despite noting a possibility of a deal this week). We had also noted the increased probability of a syndication following the decision by the MEF to not launch a new 10-year BTP at yesterday’s auction and to reopen two off-the-run BTPs with maturities around the 10-year area. We expect the transaction to launch today and look for a size of E5-10bln.
- Germany will return to the market on Wednesday with E4.5bln of the 10-year 2.20% Feb-34 Bund (ISIN: DE000BU2Z023) on offer.
USDJPY TECHS: Trading Closer To Its Recent Highs
- RES 4: 150.78 High Nov 17
- RES 3: 149.75 High Nov 22
- RES 2: 149.16 76.4% retracement of the Nov 13 - Dec 28 bull leg
- RES 1: 148.80 High Jan 19
- PRICE: 147.81 @ 06:44 GMT Jan 31
- SUP 1: 146.66 Low Jan 24
- SUP 2: 146.20 50-day EMA
- SUP 3: 144.36 Low Jan 12 and key S/T support
- SUP 4: 143.42 Low Jan 9
The USDJPY trend outlook is unchanged and remains bullish. Moving average studies have recently crossed and are in a bull-mode set-up. This reinforces the current trend condition and highlights positive market sentiment. Sights are on 149.16, a Fibonacci retracement. Key short-term support has been defined at 144.36, the Jan 12 low. A break of this level is required to signal a top. Initial firm support to watch is 146.20, 50-day EMA.
GILT TECHS: (H4) Watching Resistance Around The 20-Day EMA
- RES 4: 101.98 High Jan 3
- RES 3: 100.81 High Jan 5
- RES 2: 100.00 Round number resistance
- RES 1: 99.34/55 20-day EMA / High Jan 30
- PRICE: 98.88 @ Close Jan 30
- SUP 1: 97.57 Low Jan 25
- SUP 2: 97.39 Low Dec 11 and a key support
- SUP 3: 96.67 Low Dec 5
- SUP 4: 96.10 Low Nov 30
The trend needle in Gilt futures continues to point south and recent gains appear - for now - to be a correction. The contract has cleared support at 99.60, the Jan 5 low. This confirmed a resumption of the downtrend that started Dec 27, signalling scope for a continuation lower towards 97.39, the Dec 11 low. Firm resistance to watch is 99.34, the 20-day EMA. It has been pierced, a clear break of the average would ease bearish pressure.
