BRENT TECHS: (G6) Corrective Bounce

• Germany will return to the market on Wednesday with E3bln of the 10-year 2.60% Aug-35 Bund (ISIN: DE000BU2Z056).
• Finland will look to hold an ORI auction on Wednesday.
• Italy will look to conclude issuance for the week on Thursday with a 5/10-year BTP / CCTeu auction, with details to be confirmed this afternoon. We expect to see the on-the-run 5-year 2.85% Feb-31 BTP (ISIN: IT0005671273) and the on-the-run 10-year 3.45% Feb-36 BTP (ISIN: IT0005676504) on offer. We don’t have a strong view regarding the CCTeu that will be on offer.
  • As with the BTP Short Term / BTPei scheduled for the end of the year to be cancelled and expect this to be the last 5/10-year BTP / CCTeu of the year.

NOMINAL FLOWS: This week will see redemptions of E35.3bln, from a formerly 10-year OAT. Coupon payments for the week total E6.0bln of which E5.7bln are French and E0.2bln Italian. This leaves estimated net flows for the week at negative E19.1bln down from a negative 3.4bln last week.

The Netherlands, Italy, Germany and Finland will all look to come to the market this week. We pencil in issuance of E22.1bln for the week, down from E24.8bln last week.

See the full document here for a look ahead to the next two weeks of issuance and a recap of last week.

• The Netherlands will kick off issuance for the week tomorrow with E1.0-2.0bln of the on-the-run 30-year 3.50% Jan-56 DSL (ISIN: NL0015002P70) on offer via auction. This will be the first reopening of the DSL since its launch via DDA in September.
• Italy will hold a BTP Short Term /BTPei auction tomorrow. On offer will be E1.5-2.0bln of the on-the-run 2.10% Aug-27 BTP Short Term (ISIN: IT0005657330), E0.75-1.00bln of the 1.10% Aug-31 BTPei (ISIN: IT0005657348) and E1.25-1.50bln of the 2.40% May-39 BTPei (ISIN: IT0005547812).
  • We expect this will be the final BTP Short Term / BTPei auction of 2025 with the auction scheduled for 29 December likely to be cancelled.
• Germany will come to the market tomorrow with E4bln of the 2.20% Oct-30 Bobl (ISIN: DE000BU25059) on offer.

• RES 4: 0.8893 2.000 proj of the Sep 15 - 25 - Oct 8 price swing    
• RES 3: 0.8875 High Apr 25 
• RES 2: 0.8868 61.8% retracement of the 2022 - 2024 bear leg
• RES 1: 0.8865 High Nov 14
• PRICE: 0.8793 @ 06:44 GMT Nov 24
• SUP 1: 0.8780 Low Nov 21   
• SUP 2: 0.8769 Low Nov 10
• SUP 3: 0.8748 50-day EMA
• SUP 4: 0.8706 Low Oct 24 and a key support  

The trend set-up in EURGBP remains bullish. Recent gains reinforce the uptrend and maintain the price sequence of higher highs and higher lows. Sights are on 0.8868 next, a Fibonacci retracement point. On the downside, support at the 20-day EMA, at  0.8791, has been pierced. The next key support to monitor is 0.8748, the 50-day EMA. A clear break of the average would signal a potential reversal.