EUROZONE ISSUANCE: EGB Supply Daily

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•  Ahead of the publication of the MPC policy decision tomorrow, May CPI data will be published at 7:00BST (although the MPC will already have advance access to the data as of Monday morning).
• The ONS' VED (road tax) component error in the April dataset which boosted headline CPI by around 0.13ppt (on our calculations core by 0.16ppt and services CPI by 0.25ppt) will be reversed in the May data.
• Headline CPI was also boosted in April by Easter effects: air fares contributed 0.11ppt to the increase, package holidays 0.07ppt and sea transport 0.04ppt. These combined are therefore over 0.2ppt and along with the VED a fully reversal would see headline CPI drop by almost 0.4ppt and services CPI by almost 0.8ppt.
• The MNI median looks for a smaller fall to 3.3%Y/Y for headline (from 3.53%, 3.40% adjusted for VED) and for services to 4.8%Y/Y (from 5.42%, 5.17% adjusted). The BOE forecasts are 3.36% and 4.73% respectively. We see risks skewed more to the downside for services.
• However, there are upside risks to core goods (albeit resulting in a smaller downside surprise to the BOE) and food prices.

Germany, Spain and France will look to hold auctions during the remainder of this week. The EU held a syndication, while Germany and Slovakia already held an auction. We pencil in estimated gross issuance for the week of E29.1bln, up from E21.7bln last week.

For the full document with a recap of issuance so far this week, a look ahead to the rest of this week's and next week's issuance and a roundup of Q3 funding updates, click here.

• Germany will return to the market to hold a 30-year Bund auction today. On offer will be E1.0bln of the 2.50% Aug-46 Bund (ISIN: DE0001102341) alongside E1.5bln of the 2.50% Aug-54 Bund (ISIN: DE000BU2D004).
• Cancelled auction: The Greek PDMA has announced that it will not hold its auction which had been scheduled for today.

• RES 4: 150.49 High Apr 2   
• RES 3: 149.28 High Apr 3
• RES 2: 147.67/148.65 High May 14 / 12 and a reversal trigger
• RES 1: 145.46/146.28 High Jun 11 / High May 29 and key resistance
• PRICE: 144.98 @ 06:49 BST Jun 18
• SUP 1: 142.80/12 Low Jun 11 / Low May 27 and a key support
• SUP 2: 141.96 76.4% retracement of the Apr 22 - May 12 bull leg
• SUP 3: 139.89 Low Apr 22 and a bear trigger 
• SUP 4: 138.82 1.50 proj of the Feb 12 - Mar 11 - 28 price swing 

USDJPY is holding on to its most recent gains. A bearish trend condition remains intact and recent gains are considered corrective. Moving average studies are in a bear-mode position highlighting a dominant downtrend. A resumption of weakness would open 142.12, the May 27 low. On the upside, key short-term resistance is 146.28, the May 29 high. First resistance is 145.46, Jun 11 high.