EUROZONE ISSUANCE: EGB Supply Daily

The Netherlands is due to hold a DDA and Portugal a syndication today while Germany and Italy are both all scheduled to hold auctions this week. The EU and Belgium held auctions yesterday. We pencil in issuance of E39.0bln for the week, up from E27.7bln last week.

For the full MNI EGB Supply Daily with a recap of issuance so far this week and a look ahead to this week and next week's issuance, click here.

• The Netherlands will hold a DDA today to launch the new 30-year 3.50% Jan-56 DSL (ISIN: NL0015002P70). E4.0-5.0bln will be on offer (we assume takeup at the top of the target range). The preliminary initial spread guidance is 2.90% Aug-54 Bund + 18.5 to 22.5bps. Books are expected to open around or just before 9:00BST / 10:00CET.
• Portugal has announced a syndicated dual-tranche mandate for a new Oct-33 OT alongside a tap of the 3.625% Jun-54 OT (ISIN: PTOTE3OE0025). We expect a transaction today and pencil in a E3bln size for the new Oct-33 OT and E1.0-1.5bln tap size for the 30-year 3.625% Jun-54 OT.
  • This is broadly in line with our expectations. We've written in our daily EGB publication over the last few weeks that we see potential for one more Portuguese syndication this year. We noted that there is currently no OT maturing in 2033, meaning a long 7-year/short 8-year OT was a candidate to launch. Regarding the long-end, while there is also a gap around the 2048-2050 area – we though it would be questionable whether Portugal would want to issue in the 23-25 year area - so a 30-year tap makes sense.
• Also this morning, Germany will hold an auction to sell E4.5bln of the 1.90% Sep-27 Schatz (ISIN: DE000BU22106).

• RES 4: 5600.00 Round number resistance 
• RES 3: 5564.82 0.764 proj of the Aug 1 - 22 - Sep 2 price swing  
• RES 2: 5525.00 High Aug 22 and a bull trigger  
• RES 1: 5505.00 High Sep 19     
• PRICE: 5464.00 @ 06:32 BST Sep 22
• SUP 1: 5409.70/5366.00 20-day EMA / Low Sep 17
• SUP 2: 5302.00 Low Sep 2 and a key short-term support  
• SUP 3: 5262.18 76.4% retracement of the Aug 1 - 22 bull leg   
• SUP 4: 5181.00 Low Aug 1 and key support  

Eurostoxx 50 futures are trading closer to their recent highs. The contract recently traded through resistance around the 20-day EMA - a bullish development - and the subsequent rally reinforces a bullish theme. The move signals potential for a climb towards 5525.00, the Aug 22 high and a bull trigger. On the downside, key support has been defined at 5302.00, the Sep 2 low. Clearance of this level is required to reinstate a bearish theme.

• RES 4: 0.8835 High May 3 2023  
• RES 3: 0.8800 Round number resistance 
• RES 2: 0.8769 High Jul 28 and the bull trigger 
• RES 1: 0.8744 High Aug 7  
• PRICE: 0.8735 @ 06:43 BST Sep 23
• SUP 1: 0.8650/8597 50-day EMA / Low Aug 14 and the bear trigger
• SUP 2: 0.8562 50.0% retracement May 29 - Jul 28 upleg 
• SUP 3: 0.8540 Low Jun 30 
• SUP 4: 0.8514 61.8% retracement May 29 - Jul 28 upleg

Recent weakness in EURGBP has been corrective and last week’s recovery confirmed the end of the latest corrective phase. Support to watch lies at 0.8597, the Aug 14 low. Clearance of this level would cancel a bull theme and reinstate a recent bearish threat. For bulls, the resumption of gains opens 0.8744, the Aug 7 high. Key resistance and the bull trigger is at 0.8769, the Jul 28 high. First support is 0.8650, the 50-day EMA.