EUROZONE ISSUANCE: EGB Supply - W/C 21 April
Slovakia, Germany and Italy are all due to hold auctions in the upcoming week. There is also the potential for Austrian, Belgian and Finnish syndications in upcoming weeks, although the timing of these are more uncertain than usual given the recent market volatility. We look for estimated gross issuance for the week of E16.4bln, down from E34.0bln this week.
For the full MNI EGB Issuance, Redemption and Cash Flow Matrix click here.
- On Tuesday, Slovakia will hold a SlovGB auction. On offer will be the 3.00% Feb-28 SlovGB (ISIN: SK4000024683), the 3.75% Mar-34 SlovGB (ISIN: SK4000024865), the 3.75% Feb-35 SlovGB (ISIN: SK4000022539) and the 2.00% Oct-47 SlovGB (ISIN: SK4120013400). The auction is being held on Tuesday due to the Easter Monday holiday.
- There will be no non-competitive auction of the 3.75% Mar-34 SlovGB and there is only E241.5mln available before the issue reaches its terminal size of E5.0bln. We would therefore expect as long as there are sufficient bids that the full E241.5mln is sold at this auction.
- Also on Tuesday, Germany will sell E5bln of the new 1.70% Jun-27 Schatz (ISIN: DE000BU22098).
- On Wednesday, Germany will return to the market to issue E4bln of the 10-year 2.50% Feb-35 Bund (ISIN: DE000BU2Z049).
- To conclude the week, Italy will hold a BTP Short Term auction on Thursday. We expect a reopening of the 2.55% Feb-27 BTP Short Term (ISIN: IT0005633794). Details will be announced on Tuesday (T-2 rather than the usual T-3 due to the public holiday).
- Note that the BTPei line has been cancelled due to the syndicated launch of the May-56 BTPei via syndication.
NOMINAL FLOWS: The upcoming week April sees redemptions of E9.6bln, E9.1bln of which is from a formerly 4-year Austrian RAGB and E0.5bln is from a formerly 5-year Austrian fixed USD bond. Coupon payments for the week total E9.8bln of which E9.1bln are French and E0.4bln are Belgian. This leaves estimated net flows for the week at negative E2.9bln, versus positive E11.6bln this week.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
EU: Von Der Leyen Says EU Must "Get Ready For War"
European Commission President Ursula von der Leyen has stated in a speech at the Royal Danish Military Academy in Copenhagen that Europe “must get ready for war,” following a period of “underinvestment” and “complacency” in defence policy.
- Von der Leyen says: “By 2030, Europe must have strong defence posture," says the EU's 'Readiness 2030' means "to have re-armed and developed capabilities to have credible deterrence.”
- Says that tomorrow the EU will unveil a ‘roadmap’ for ‘Readiness 2023’ which will cover four key priorities and detail 800 billion euros of spending. VDL says the roadmap will cover joint procurement that will allow the EU to “buy faster and buy more European.”
- Von der Leyen says that the first priority for Europe is a “surge in defence spending”. Says the EU must develop “large-scale projects” and “step up collaborative procurement”.
- Von der Leyen adds that the EU will set up a joint task force with Ukraine to “coordinate military support”, and the bloc is working to break new ground on security with the UK.”
- Von der Leyen says that decisions to ramp up defence spending taken by Denmark and Germany (today) are “both historic and necessary.”
FED: US TSY 52W AUCTION: NON-COMP BIDS $1.218 BLN FROM $48.000 BLN TOTAL
- US TSY 52W AUCTION: NON-COMP BIDS $1.218 BLN FROM $48.000 BLN TOTAL
GERMANY: Bundestag Passes Debt Brake Reform & Infra Fund Creation w/ 2/3 Maj.
The Bundestag has approved a constitutional amendment to loosen the federal debt brake to allow for greater defence spending, to create an E500B infrastructure fund, and allow the federal states to rack up a structural deficit of 0.35% of GDP. The measures passed with 517 votes in favour and 207 opposed, crossing the two-thirds majority threshold of 489. Following the deal reached late last week, the vote totals would indicate that only a handful of lawmakers from the conservative Christian Democratic Union/Christian Social Union, the centre-left Social Democrats, and the environmentalist Greens did not vote in favour of the landmark reforms.
- As noted earlier (see 'GERMANY: Bundesrat Should Not Prove Obstacle To Debt Brake Reform', 1129GMT), the measures will now go to the Bundesrat, which holds its next plenary session on 21 March. It is largely seen as a formality that the chamber will pass the measures, allowing them to go onto the statute books before the new Bundestag convenes on 25 March. With the passage of the reforms, the 'old' Bundestag has been formally closed.
