EUROZONE ISSUANCE: EGB Supply – W/C 13 October
The ESM is likely to hold a syndication while the Netherlands, Italy, Germany, Spain, France and potentially Greece will all hold auctions in the upcoming week. We pencil in issuance of E38.0bln for the week, up from E20.5bln this week. There is also the potential for a Slovakian syndication, but we think the W/C 20 October is slightly more likely.
- The ESM sent an RFP (Request for Proposal) on Wednesday. This likely means a transaction on Monday / Tuesday in the upcoming week is likely. We pencil in a transaction of around E1.25bln (E1.0-1.5bln). The annual funding target was for E7bln and so far there have been 3/10-year EUR issues for E2bln each and a 5-year USD issue for USD2bln.
- The Netherlands will look to kick off auction issuance for the week on Tuesday with E2.0-2.5bln of the 0% Jul-31 DSL (ISIN: NL00150006U0) on offer.
- Italy will then come to the market on Tuesday to hold a 3/7/15 year BTP auction. On offer will be E1.00-1.25bln of the off-the-run 2.80% Dec-28 BTP (ISIN: IT0005340929), E1.5-2.0bln of the on-the-run 3-year 2.35% Jan-29 BTP (ISIN: IT0005660052), E3.0-3.5bln of the on-the-run 7-year 3.25% Nov-32 BTP (ISIN: IT0005668220) and E1.25-1.75bln of the on-the-run 15-year 3.85% Oct-40 BTP (ISIN: IT0005635583).
- Germany will conclude issuance for Tuesday with E5.5bln of the new Dec-27 Schatz (ISIN: DE000BU22114) on offer. The coupon will be announced the preceding day.
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SCANDIS: Fresh Strength For NOK and SEK Since the US Equity Open
Fresh strength seen for Scandi FX since the US cash open, seemingly a function of the broader dollar pullback post-US PPI rather than in response to any fresh domestic catalyst. NOK and SEK outperform the G10 basket on an intraday basis.
- USDNOK (-0.9%) is narrowing the gap to the June 17 low at 9.8615, clearance of which would expose the December 2022 low at 9.6982.
- A reminder that this morning’s August inflation report was stronger-than-expected, driving a 7bp intraday rise in 2-year NOK swap rates and placing heightened focus on tomorrow’s Q3 Regional Network Survey. A Norges Bank hold next week is still possible if that survey is hawkish.
- USDSEK meanwhile has registered a fresh multi-year low, with support seen at 9.2307 (March 2022 low).
- Tomorrow’s Swedish calendar includes the final August inflation report, details of which will be important to judge the likelihood of a September rate cut. With Riksbank Deputy Governor Jansson not coming across as overtly dovish following the lower-than-expected flash release last week, the Executive Board could decide to keep rates steady in September, and save some dry powder for later this year if required.
- Riksbank Governor Thedéen also speaks tomorrow at 1200BST. The topic of the speech is banking sector liquidity.
GLOBAL: MNI Tech Trend Monitor - Highlighting Key Longer-Term Trends
MNI Tech Trend Monitor: https://emedia.marketnews.com/marketnewsintl/MNITechTrendMonitor.pdf
We introduce the MNI Tech Trend Monitor - This document highlights a selection of key longer-term trends that we have identified in markets that could be reaching inflection points, trend reversals/extensions or technically significant levels.
Covering:
- UK Gilt 10y Yield
- UK Gilt 30y Yield
- ICE USD Index
- Europe Banking Stock Index (SX7E)
