BTP TECHS: (H6) Monitoring Resistance

Austria and Italy will look to hold conventional auctions this week. We pencil in issuance of E5.6bln for the week, down from E17.8bln last week. We expect Ireland, the Netherlands (Friday) and potentially Portugal to release 2026 funding plans. There may also be an update to the Slovak 2026 funding plan either this week or next. For details of funding plans released so far see pages 2-3 of the PDF

For the full MNI EGB Issuance, Redemption and Cash Flow Matrix with a look ahead to the remaining year's issuance and summaries of 2026 funding plans, click here..

• Austria will kick off issuance for the week tomorrow, with E575mln of the 2.80% Sep-32 RAGB (ISIN: AT0000A3NY15) on offer.
• Italy will come to the market on Thursday to hold a 3/5 year BTP auction (with no 7/15+ year BTP on offer) in the final Italian auction of 2025. On offer will be E2.5-3.0bln of the on-the-run 3-year 2.35% Jan-29 BTP (ISIN: IT0005660052) alongside E0.75-1.0bln of the 3.00% Oct-29 BTP (ISIN: IT0005611055) and E0.75-1.0bln of the 2.70% Oct-30 BTP (ISIN: IT0005654642). With the exception of the 3-year, the other two BTPs on offer are off-the-run.
  • As we had expected, the MEF has cancelled the bond auctions scheduled for 29/30 December as well as the BOT auction scheduled for 29 December.

NOMINAL FLOWS: This week will see a redemption of E19.0bln from a German Schatz. Coupon payments for the week total E2.2bln of which E1.1bln are from the EU and E1.0bln German. This leaves estimated net flows for the week at negative E15.6bln, versus negative E15.1bln last week.

• MNI: GERMANY OCT IND PROD +1.8% M/M, +0.8% Y/Y (VS +1.1% M/M, -1.4% Y/Y SEP)

• RES 4: 0.8840 High Nov 20   
• RES 3: 0.8818 High Nov 26 
• RES 2: 0.8802 High Dec 2 and a key near-term resistance 
• RES 1: 0.8772 20-day EMA
• PRICE: 0.8747 @ 06:56 GMT Dec 8
• SUP 1: 0.8722 Low Dec 4
• SUP 2: 0.8706 76.4% retracement of the Oct 8 - Nov 14 bull leg
• SUP 3: 0.8670 Low Oct 21   
• SUP 4: 0.8656 Low Oct 8 and a key support  

The trend set-up in EURGBP is bullish and the current bear cycle appears corrective - for now. Note that the cross has breached the 50-day EMA, currently at 0.8753. The break highlights a stronger reversal and a bear threat plus scope for a deeper retracement, towards 0.8706, a Fibonacci retracement. Initial resistance to watch is 0.8802, the Dec 2 high. A breach of this hurdle would be a bullish development.