EUROZONE ISSUANCE: EGB Supply - W/C 28 April, 2025
The EU, Belgium, Italy and Germany all look to hold auctions in the week ahead. There are also possible Belgian and Finnish syndications in upcoming weeks. We pencil in estimated gross issuance for the week of E24.6bln, up from the E20.5bln sold this week.
For the full MNI Issuance, Redemption and Cash Flow Matrix click here.
- On Monday, the EU will look to hold its first ever triple-line EU-bond auction. On offer will be up to E2.5bln of the 2.875% Oct-29 EU-bond (ISIN: EU000A3L1CN4), up to E2bln of the 3.00% Dec-34 EU-bond (ISIN: EU000A3K4ES4) and up to E1.5bln of the 3.375% Oct-38 EU-bond (ISIN: EU000A3K4D74).
- Belgium will also hold a conventional auction on Monday with E2.8-3.2bln of OLOs on offer. On offer will be the 2.85% Oct-34 OLO (ISIN: BE0000360694), the first reopening of the on-the-run 10-year 3.10% Jun-35 OLO (ISIN: BE0000363722) and the 2.75% Apr-39 Green OLO (ISIN: BE0000356650).
- On Tuesday, Italy will hold a 5/10-year BTP and CCTeu auction. On offer will be E3.0-3.5bln of the on-the-run 5-year 2.95% Jul-30 BTP (ISIN: IT0005637399), E3.5-4.0bln of the new 3.60% Oct-35 BTP (ISIN: IT0005648149) and E1.5-2.0bln of the Apr-33 CCTeu (ISIN: IT0005620460).
- On Wednesday, Germany will hold a 15-year Bund auction. On offer will be E1.5bln of the on-the-run 2.60% May-41 Bund (ISIN: DE000BU2F009) alongside E500mln of the 2.50% Jul-44 Bund (ISIN: DE0001135481).
- On Friday, Belgium will look to conclude the week by holding an ORI auction. Details will be announced the preceding day.
NOMINAL FLOWS: The week ahead sees redemptions of E26.2bln: E21.7bln of a formerly 10-year Spanish Obli, E3.0bln of a formerly 10-year EFSF bond and E1.5bln of a formerly 5-year Luxembourg LGB. Coupon payments for the week total E9.6bln of which E5.0bln are Italian and E4.5bln are Spanish. This leaves estimated net flows for the week at negative E11.3bln versus positive E1.1bln this week.
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US OUTLOOK/OPINION: Cleveland Fed Staff On PCE Inflation Residual Seasonality
- The concept of residual seasonality, whereby data exhibit a seasonal pattern even after adjustment (and seemingly especially so for inflation data), has been a contentious topic.
- Cleveland Fed’s Lunsford finds evidence of residual seasonality across five measures of PCE inflation (headline, core, market-based core, median and trimmed mean) when looking across data from 1987 to Jan 2025. Full note here.
- “For core and market-based core PCE inflation, average inflation in January has been 1.5 to 2.0 times higher than in November and December, again, depending on the sample period.”
- “Following the high inflation from 2021 through 2023, these residual seasonal fluctuations can complicate assessments of monthly data, making it hard to know if inflation is returning sustainably to 2 percent.”
- The research finds the most prominent upward bias is in January alone rather than seeing any lingering into February.
- We note that for February as it comes ahead of Friday’s February report which sees core PCE inflation at 0.3% M/M but perhaps only just rounding down to this rate according to unrounded estimates. It follows 0.285% M/M in Jan, 0.21% in Dec and 0.10% in Nov (before any revisions).
US: SFR call spread
0QM5 97.12c vs 2QU5 97.50c, bought the 2yr for half in 10k.
EQUITY TECHS: E-MINI S&P: (M5) Retracement Mode Remains Intact
- RES 4: 5970.87 61.8% retracement of the Feb 19 - Mar 13 bear leg
- RES 3: 5924.59 50-day EMA
- RES 2: 5864.25 Low Jan 13 and a recent breakout level
- RES 1: 5837.25 High Mar 25
- PRICE: 5818.75 @ 13:50 GMT Mar 26
- SUP 1: 5650.75/5559.75 Low Mar 18 / 13 and the bear trigger
- SUP 2: 5483.50 2.00 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing
- SUP 3: 5396.00 2.236 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing
- SUP 4: 5341.87 2.382 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing
S&P E-Minis are trading at their recent highs. The trend condition is bearish and the latest recovery appears corrective. MA studies remain in a bear-mode set-up, highlighting a dominant downtrend. However, this week’s gains have resulted in a breach of the 20-day EMA. This signals scope for a continuation higher near-term - towards 5864.25, the Jan 13 low. A reversal lower would refocus attention on 5559.75, the Mar 13 low and bear trigger.
