EUROZONE ISSUANCE: EGB Supply Daily
Germany is due to hold a 15-year Bund auction today while Italy will hold a buyback auction. Later this week, Spain, France and Belgium will all look to hold auctions. The EFSF held a syndication yesterday while the EU, Austria and Germany have held auctions this week. We pencil in issuance of E34.1bln for the week, up from E31.0bln last week.
- Italy will look to buyback up to E5.0bln today via Banca d'Italia. It will look to purchase the following: the 3.20% Jan-26 BTP Short Term (ISIN: IT0005584302), the 4.50% Mar-26 BTP (ISIN: IT0004644735), the 3.80% Apr-26 BTP (ISIN: IT0005538597), the 2.10% Jul-26 BTP (ISIN: IT0005370306), the 3.85% Sep-26 BTP (ISIN: IT0005556011) and the Apr-26 CCTeu (ISIN: IT0005428617).
- Germany will return to the market this morning to hold a 15-year Bund auction. On offer will be E1bln of the 2.60% May-41 Bund (ISIN: DE000BU2F009) alongside E1bln of the 2.50% Jul-44 Bund (ISIN: DE0001135481).
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STIR: Global Political Developments Keep Focus At The Long-end
There’s little action in EUR STIRs to start the week, with most attention further out global curves amid political developments in France and Japan (alongside the ongoing US Shutdown). ECB-dated OIS price 9bps of easing through June 2026, just over 0.5bps more dovish than Friday's close. Today’s regional calendar includes October Sentix and August retail sales data – neither are expected to shift the near-term ECB narrative much.
- Several ECB speakers (Guindos, Lane, Escriva and Lagarde) are scheduled to speak today. We don’t expect major deviations from recent rhetoric, which suggests rates are appropriate at current levels barring an unexpected deterioration in the inflation/activity data.
- Euribor futures are +0.5 to -1.5 ticks through the blues, with the strip twist steepening.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Oct-25 | 1.927 | 0.6 |
| Dec-25 | 1.912 | -0.9 |
| Feb-26 | 1.901 | -2.0 |
| Mar-26 | 1.858 | -6.3 |
| Apr-26 | 1.853 | -6.8 |
| Jun-26 | 1.838 | -8.4 |
| Jul-26 | 1.840 | -8.1 |
| Sep-26 | 1.850 | -7.1 |
| Source: MNI/Bloomberg Finance L.P. | ||
EQUITY OPTIONS: Large Estoxx Risk Hedges on Friday
Some very Large late Option print in Estoxx on Friday, hedging Risk:
- SX5E (16th Jan) 4425/4375ps, bought for 1 in 100k.
- SX5E (16th Jan) 4775/4725ps, bought for 2 in 50k.
EQUITY TECHS: E-MINI S&P: (Z5) Northbound
- RES 4: 6831.38 2.500 proj of the Aug 20 - 28 - Sep 2 price swing
- RES 3: 6819.25 1.500 proj of the Aug 1 - 15 - 20 price swing
- RES 2: 6812.29 2.382 proj of the Aug 20 - 28 - Sep 2 price swing
- RES 1: 6800.00 Round number resistance and Friday’s high
- PRICE: 6781.75 @ 07:28 BST Oct 6
- SUP 1: 6684.22 20-day EMA
- SUP 2: 6624.25 Low Sep 25
- SUP 3: 6566.78 50-day EMA
- SUP 4: 6506.50 Low Sep 5
A bull cycle in S&P E-Minis remains intact. The contract traded to a fresh cycle high last week to confirm a resumption of the uptrend and maintain the positive price sequence of higher highs and higher lows. Sights are on 6812.29, a Fibonacci projection. Initial support to watch is at the 20-day EMA, at 66.84.22. It has recently been pierced, a clear break of it would signal scope for a deeper pullback, potentially towards the 50-day EMA, at 6566.78.
