EUROZONE ISSUANCE: EGB Supply

The EU has a scheduled syndication while the Netherlands, Finland, Germany and Italy all look to hold auctions this week. We pencil in estimated gross issuance for the week at E23.5bln, down from E31.3bln last week.

• The EU will hold a syndication on Tuesday to launch a new 15-year EU-bond maturing 4 October 2039. As we have noted since the previous EU-bond syndication, a 15-year transaction is in line with our expectations. We pencil in a transaction size of E5-8bln.
• The Netherlands also on Tuesday will look to hold an auction selling E1.5-2.0bln of the 10-year on-the-run 2.50% Jul-34 DSL (ISIN: NL0015001XZ6).
• Finland will look to come to the market on Tuesday to sell a combined up to E1.5bln of the on-the-run 10/30-year RFGBs: the 3.00% Sep-34 RFGB (ISIN: FI4000571104) and the 2.95% Apr-55 RFGB (ISIN: FI4000566294).
• Germany, on Wednesday, will look to sell E4bln of the 2.20% Feb-34 Bund (ISIN: DE000BU2Z023).
• Italy will conclude the week on Thursday by holding a 3/7/15/25-year BTP auction. On offer will be E3.5-4.0bln of the new 3-year 3.45% Jul-27 BTP (ISIN: IT0005599904), E2.0-2.5bln of the 3.45% Jul-31 BTP (ISIN: IT0005595803), E1.0-1.25bln of the 4.15% Oct-39 BTP (ISIN: IT0005582421) and E1.0-1.25bln of the 3.85% Sep-49 BTP (ISIN: IT0005363111).

EZ240611.pdf

• RES 4: 98.89 High May 16 a key resistance
• RES 3: 98.25 High May 21
• RES 2: 98.04 76.4% retracement of the May 16 - 29 bear cycle
• RES 1: 96.70/97.86 High Jun 10 / 4
• PRICE: 96.22 @ Close Jun 10
• SUP 1: 96.12 Low Jun 10
• SUP 2: 95.58 Low May 31
• SUP 3: 95.33 Low May 29 and the bear trigger
• SUP 4: 95.00 Round number support

Gilt futures traded lower Friday and Monday and remains below last week’s high of 97.86 (Jun 4). For now, the recent climb is considered corrective. The next important resistance to watch is 97.86 and 98.04, a Fibonacci retracement point. A clear break of the latter would strengthen a bull phase and signal scope for a climb towards 98.89, the May 16 high. A stronger reversal lower would refocus attention on key support at 95.33, May 29 low.

Germany and France already sold bills this week, whilst Spain, Belgium and Italy are all due to sell bills this week. We expect issuance to be E22.2bln in first round operations, down from E24.1bln last week.

• This morning, Spain will look to sell a combined E1.5-2.5bln of the 3-month Sep 6, 2024 letras and the 9-month Mar 7, 2025 letras.
• Also this morning, Belgium will look to issue an indicative E1.2bln (E1.0-1.4bln) of the 11-month May 8, 2025 TC.
• Finally, tomorrow, Italy will come to the market to sell E7.5bln of the new 12-month June 13, 2025 BOT.

For more on future auctions see the full MNI Eurozone/UK T-bill auction calendar here.