EUROZONE ISSUANCE: EGB Supply
Germany and France both look to hold auctions today, whilst Germany also held an auction yesterday. We pencil in estimated gross issuance for the week at E18.1bln, up from E7.8bln last week.
- This morning, France will hold an MT OAT auction with E7.5-9.0bln on offer. As expected, given that it is August there is a smaller auction size. On offer will be the 0% Feb-27 OAT (ISIN: FR0014003513), the 2.75% Feb-29 OAT (ISIN: FR001400HI98), the on-the-run 2.75% Feb-30 OAT (ISIN: FR001400PM68), and the 0% Nov-31 OAT (ISIN: FR0014002WK3).
- Also this morning, Germany will return to the market to hold a 30-year Bund auction. On offer will be E1bln of the 2.50% Aug-54 Bund (ISIN: DE000BU2D004) alongside E1bln of the 0% Aug-50 Bund (ISIN:DE0001102481).
- Finally today, France will hold an IL OAT auction with E1.25-2.00bln on offer of the following: the 0.10% Mar-29 OATei (ISIN: FR0013410552), the 0.10% Mar-36 OATi (ISIN: FR0013524014), the 0.10% Jul-36 OATei (ISIN: FR0013327491), and the 0.10% Jul-53 OATei (ISIN: FR0014008181).
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EURJPY TECHS: Monitoring Trendline Support
- RES 4: 177.27 2.0% 10-dma envelope
- RES 3: 176.82 1.764 proj of the May 3 - 15 - 16 price swing
- RES 2: 176.03 1.618 proj of the May 3 - 15 - 16 price swing
- RES 1: 173.92/175.43 61.8% of the Jul 11 - 12 sell-off / High Jul 11
- PRICE: 172.06 @ 06:43 BST Jul 15
- SUP 1: 171.47 Low Jul 12
- SUP 2: 170.21 Trendline drawn from the Dec 7 ‘23 low
- SUP 3: 167.53 Low Jun 14
- SUP 4: 167.33 Low May 16
The sharp sell-offs in EURJPY last Thursday resulted in a breach of the 20-day EMA. For now, short-term weakness appears to be a correction. Attention is on the key support at 170.21, a trendline drawn from the Dec 7 ‘23 low. A clear break of this line is required to highlight a stronger reversal. Key resistance and the bull trigger has been defined at 175.43, the Jun 11 high. A break would resume the uptrend.
EUROZONE T-BILL ISSUANCE: W/C April 15, 2024
Germany, the Netherlands, France, the ESM, Portugal and the EU are due to sell bills this week. We expect issuance to be E18.7bln in first round operations, down from E24.5bln last week.
- This morning, Germany will come to the market to sell E3bln of the new 12-month Jul 16, 2025 bubill.
- Also this morning, the Netherlands will sell E1.0-1.5bln of the 3-month Oct 30, 2024 DTC and E0.5-1.5bln of the 4-month Nov 28, 2024 DTC.
- This afternoon, France will look to sell up to E7.7bln of 12/15/26/52-week BTFs: E3.2-3.6bln of the 12-week Oct 9, 2024 BTF; E0.2-0.6bln of the 15-week Oct 30, 2024 BTF; E1.3-1.7bln of the 26-week Jan 15, 2025 BTF; E1.4-1.8bln of the new 52-week Jul 17, 2025 BTF.
- On Tuesday, the ESM will sell up to E1.1bln of the new 6-month Jan 23, 2025 bills.
- On Wednesday morning, Portgual will come to the market to sell E1.00-1.25bln of the 4-month Nov 22, 2024 BT.
- Finally on Wednesday, the EU will look sell up to E1.5bln of the 3-month Oct 4, 2024 EU-bill and up to E1.5bln of the 6-month Jan 10, 2025 EU-bill.
For more on future auctions see the full MNI Eurozone/UK T-bill auction calendar here.
GILT TECHS: (U4) Bullish Price Action
- RES 4: 100.00 Psychological round number
- RES 3: 99.62 1.382 proj of the May 29 - Jun 4 - 10 price swing
- RES 2: 98.92/99.23 High Jun 25 / 21 and a key resistance
- RES 1: 98.53 High Jul 11
- PRICE: 98.16 @ Close Jul 12
- SUP 1: 97.63/96.57 Low Jul 11 / 1 and a key support
- SUP 2: 96.25 76.4% retracement of the May 29 - Jun 21 bull run
- SUP 3: 96.12 Low Jun 10
- SUP 4: 95.33 Low May 29 and a key support
Gilt futures traded higher last Thursday and the contract is holding on to the bulk of its recent gains. Resistance at 98.24, the Jun 28 high, has been cleared. A continuation would expose key short-term resistance at 99.23, the Jun 21 high. On the downside, initial support to watch lies at 97.63, Thursday’s low. A break would highlight a reversal and this would refocus attention on 96.57, the Jul 1 low and a key short-term support.
