EM CEEMEA CREDIT: Gorenjska Banka DD Kranj Min. EU50m 10NC5 T2 - IPT

With light newsflow, sizeable option expiries helped exert influence over Monday range - helping contain the EUR/USD rally into the 10am NY cut. Today's expiry slate looks less effectual for EUR/USD, however GBP/USD's rally off yesterday's 1.3483 low brings today's $1.3595-00 strike into play. Meanwhile, USD/JPY's BoJ triggered slip today puts spot nearer decent-sized expiries at Y145.85-00 ($1.4bln)

• EUR/USD: $1.1650-70(E1.0bln), $1.1685-05(E2.3bln), $1.1750(E835mln), $1.1790-00(E1.2bln)
• USD/JPY: Y145.85-00($1.4bln), Y150.00($1.1bln)
• GBP/USD: $1.3595-20(Gbp1.0bln)

This morning, Germany will hold a Green Bund auction. On offer will be E500mln of the 0% Aug-31 Green Bund (ISIN: DE0001030732) alongside E1bln of the 2.50% Feb-35 Green Bund (ISIN: DE000BU3Z047).

• The size is in line with the combined E1.5bln seen at the last Green Bund auction in late July.
• Recent auctions in the German 5-10 year Green Bund segment have passed smoothly, with solid bid-to-covers (in a 2.07x to 3.76x range since May), bid-to-offers (1.92x to 3.75x range since May) and the low prices above the secondary market mid-prices throughout 2025. The last auction with weaker demand metrics was the 2.50% Feb-35 Green Bund on April 8 (1.32x bid-to-cover, 1.05x bid-to-offer).
• For the last 2.50% Feb-35 Green Bund auction on 22 July, the bid-to-cover stood at 2.07x, while the bid-to-offer came in at 1.92x.
• However, for non-green Bunds, demand was mixed at best recently. On September 3, the 2.60% Aug-35 Bund saw a bid-to-cover of 1.45x and a bid-to-offer of 1.10x, while the new opening of the 2.50% Nov-32 Bund on August 27 saw metrics of 1.19x and 0.79x, respectively.
• Domestically in Germany, the government's "autumn of reforms" is set to start this week, meaning a) income tax changes, b) social security net cuts and c) pension system reform are all being discussed if not in the pipeline. The backdrop remains weak growth, a E30bln+ gap in the 2027 budget as well as right-wing AfD polling close to the largest party nationally.
• The next German auction will be tomorrow's dual-tranche E1bln of the 4.75% Jul-40 Bund (ISIN: DE0001135366) alongside E1.5bln of the 2.60% May-41 Bund (ISIN: DE000BU2F009), while the next German green auction will be on October 21.
• Timing: Results will be available shortly after the bidding window closes at 10:30BST / 11:30CET.