EUROZONE ISSUANCE: EGB Supply Daily

Weakness in JGBs has weighed on wider risk sentiment in the Asia-Europe crossover, with both S&P 500 e-mini & Euro Stoxx 50 futures trading through yesterday’s lows. Our technical analyst’s next support levels are located at 6,866.75 (Jan 2 low) & 5,802.75 (the 50-day EMA), respectively 

For the full MNI UK Labour Market and CPI Preview including summaries of analyst expectations click here.

• Private regular wage growth is expected to continue to moderate and the MNI median sees it at 3.7%Y/Y in the 3-months to November (with a skew towards a lower number). This would be a deceleration from 3.87%Y/Y in the 3-months to October and on the way to the BOE's Q4 forecast of 3.51%. Assuming no revisions, this would imply a single month number for November of 3.55%Y/Y and 3.88%Y/Y – hence either slightly above the 3.48%Y/Y seen in October or as much as four tenths higher. Of course, the expectation could also be that there is an upward revision to October data and then the Y/Y rate in November is similar. To us risks seems skewed towards a softer print than 3.7%.
• Quantities data is expected to show further payrolls deterioration but at a slower pace than November’s -38k. The MNI median looks for December payrolls at -20k but some analysts have also noted that they look for upward revisions to November’s data (Goldman Sachs putting the most optimistic number of -15k for November’s revisions that we have seen).
• For the unemployment rate, analysts are generally split between it continuing to round to 5.1% or fall back to 5.0%. The MNI median looks for 5.1% but the mean is 5.06%. Only one analyst preview that we have seen (Morgan Stanley) looks for an increase in the rounded rate to 5.2%.

Spain is likely to hold a syndication today while Germany and France are both scheduled to hold auctions later this week. Slovakia already held an auction yesterday while and we also see a good chance of an Austrian multi-tranche syndication this week. We look for issuance of E39.3bln for the week, down from E68.8bln last week.

For the full document with a recap of issuance so far this week, a look ahead to issuance through the remainder of this week and next week and a summary of January syndication expectations click here.

• Spain announced a mandate to hold a syndication in the “near future” yesterday to launch a new 10-year Apr-36 Obli. This was in line with our expectations and we pencil in a E13-15bln transaction today.