EM ASIA CREDIT: Greentown China (GRNCH, B1/NR/NR) April sales disappoint

• RES 4: 5766.42 50-day EMA
• RES 3: 5554.41 20-day EMA      
• RES 2: 5435.00 High Apr 4
• RES 1: 5305.25 High Apr 8                             
• PRICE: 4880.75 @ 06:42 BST Apr 9   
• SUP 1: 4832.00 Low Apr 7 and the bear trigger                      
• SUP 2: 4760.88 1.618 proj of the Feb 19 - Mar 13 - 25 price swing 
• SUP 3: 4663.75 1.764 proj of the Feb 19 - Mar 13 - 25 price swing
• 7SUP 4: 4519.84 61.8% retracement of the Oc ‘22 - Feb ‘25 bull cycle   

A bearish theme in S&P E-Minis remains intact and the cross is approaching its recent lows. Scope is seen for an extension towards the 4800.00 handle next. Note that moving average studies are in a bear-mode position, highlighting a dominant downtrend and bearish market sentiment. Initial firm resistance is seen at 5554.41, the 20-day EMA. Short-term gains are for now, considered corrective.

Portugal, Spain and Italy are all still due to hold auctions this week. Already this week, the EU held a syndication while the Netherlands, Austria and Germany held conventional auctions.  There is also the potential for Austrian, Belgian, Finnish and Italian syndications in upcoming weeks. We look for estimated gross issuance for the week of E31.9bln, lower than the E38.6bln last week.

For more on this week's issuance and a look ahead to next week's issuance see the full PDF here.

• Portugal will hold an OT auction this morning to sell a combined E1.00-1.25bln of the 3.875% Feb-30 OT (ISIN: PTOTEROE0014) and the 4.10% Apr-37 OT (ISIN: PTOTE5OE0007).
• Tomorrow will see Spain come to the market, holding its second April auction a little earlier than usual due to the timing of Easter. On offer will be a combined E5.5-6.5bln of the 3.50% May-29 Bono (ISIN: ES0000012M51), the 2.55% Oct-32 Obli (ISIN: ES0000012K61) and the on-the-run 3.15% Apr-35 Obli (ISIN: ES0000012O67).
• Italy will look to conclude the week on Friday with a 3/7/13 year BTP auction. On offer will be E3.0-3.5bln of the on-the-run 3-year 2.65% Jun-28 BTP (ISIN: IT0005641029), E2.0-2.5bln of the on-the-run 7-year 3.15% Nov-31 BTP (ISIN: IT0005619546), E1.25-1.50bln of the off-the-run 7-year 0.95% Jun-32 BTP (ISIN: IT0005466013) and E1.0-1.5bln of the 3.25% Mar-38 BTP (ISIN: IT0005496770).
  • We had been expecting a new 7-year BTP maturing 15 July 2032 to launch at this auction. We think that market conditions may have put the MEF off here – but still think there is a chance that this launches via a dual-tranche syndication ahead of the May 7-year auction. If not, we have a strong conviction that it will be launched in the May auction.

• RES 4: 165.43 High Nov 8        
• RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance   
• RES 2: 164.55 High Jan 7
• RES 1: 162.37/164.19 High Apr 7 / High Mar 18 and the bull trigger 
• PRICE: 160.64 @ 06:46 GMT Apr 9 
• SUP 1: 158.30 Low Apr 7   
• SUP 2: 157.02 76.4% retracement of the Feb 28 - Mar 18 bull cycle  
• SUP 3: 155.60 Low Low Mar 4  
• SUP 4: 154.80 Low Low Feb 28  

EURJPY continues to trade in a volatile manner. Recent weakness still appears corrective, and the strong rally off Monday’s low reinforces this theme. Key short-term support has been defined at 158.30, Apr 7 low. A break of this level is required to signal scope for a deeper retracement. For bulls, a resumption of gains would expose 164.19, the Mar 18 high and the bull trigger.