GBPUSD TECHS: Trend Needle Points South
- RES 4: 1.3389 High Oct 1
- RES 3: 1.3274 High Oct 3 and the bull trigger
- RES 2: 1.3175 High Oct 4
- RES 1: 1.3071/3093 High Oct 18 / 20-day EMA
- PRICE: 1.2991 @ 06:46 BST Oct 23
- SUP 1: 1.2945 Low Oct 22
- SUP 2: 1.2890 Low Aug 18
- SUP 3: 1.2846 76.4% retracement of the Aug 8 - Sep 25 bull leg
- SUP 4: 1.2799 Low Aug 15
GBPUSD traded lower Tuesday and a bearish theme remains intact. The move down confirms a resumption of the bear trend and has resulted in a print below 1.2959, the 61.8% retracement of the Aug 8 - Sep 25 bull leg. An extension lower would open 1.2890, the Aug 18 low. On the upside, initial resistance to watch is 1.3093, the 20-day EMA. A clear breach of this EMA is required to signal a reversal.
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EUROZONE ISSUANCE: EGB Supply - W/C 23 September, 2024 (1/2)
The EU, Belgium, Germany and Italy look to hold auctions, whilst the ESM and potentially Spain are likely to hold syndications in the upcoming week. We pencil in estimated gross issuance for the week at E35.3bln, up from E27.8bln last week.
- The ESM last Wednesday sent a Request for Proposal for an upcoming syndication. MNI looks for a E2bln WNG transaction in the upcoming week. We don’t have a strong view on the maturity.
- The EU will kick off auctions today. On offer is up to E2.5bln of the 2.875% Oct-29 EU-bond (ISIN: EU000A3L1CN4) and up to E2.5bln of the 4.00% Apr-44 EU-bond (ISIN: EU000A3K4EL9).
- Also today, Belgium will hold a conventional auction with a target range of E2.3-2.8bln. On offer are the 0.90% Jun-29 OLO (ISIN: BE0000347568), the 3.00% Jun-33 OLO (ISIN: BE0000357666), and the 2.75% Apr-39 Green OLO (ISIN: BE0000356650).
- Note that this is the largest target range since March, with the step up in size likely due to the rollover into Septembers 1-year retail Bons D’Etat falling well short of BDA expectations.
Germany tomorrow will sell E4.5bln of the 2.70% Sep-26 Schatz (ISIN: DE000BU22064).
EUROZONE T-BILL ISSUANCE: W/C September 23, 2024
Germany, France, Austria, Greece and Italy are all due to sell bills this week. We expect issuance to be E20.5bln in first round operations, up from E17.8bln last week.
- This morning, Germany will sell E2bln of the 5-month Feb 19, 2025 bubill and E2bln of the 11-month Aug 20, 2025 bubill.
- This afternoon, France will look to issue up to E8.0bln of12/16/28/50-week BTFs: E3.1-3.5bln of the 12-week Dec 18, 2024 BTF, E0.3-0.7bln of the 16-week Jan 15, 2025 BTF, E1.6-2.0bln of the new 28-week Apr 9, 2025 BTF and E1.4-1.8bln of the 50-week Sep 10, 2025 BTF.
- Tomorrow, Austria will come to the market to sell E1bln of the 4-month Jan 30, 2025 ATB and E1bln of the new 7-month Apr 24, 2025 ATB.
- On Wednesday, Greece, will issue E500mln of the new 26-week Mar 28, 2025 GTB.
Finally on Thursday, Italy will end the week by selling a new 6-month BOT. Details will be announced later today.
For more on future auctions see the full MNI Eurozone/UK T-bill auction calendar here.
CHINA: Bond Wrap
- Ahead of National Holiday’s next week, the PBOC cut the 14-day repo rate by 10bps. The 14-day rate is typically used around holiday times where a 7-day repo would expire.
- The market saw this as potential evidence of further policy moves to come.
- Equity markets were strong again, following last weeks’ rally. Bonds were quiet.
2yr 1.374% 5yr 1.705% 10yr 2.035% (-0.5bp) 30yr 2.150%
