USDJPY TECHS: In A Range

Belgium, Germany and Italy look to hold auctions this week. We pencil in issuance of E17.0bln in the week, up from last week’s E10.8bln.

For the full MNI EGB Issuance, Redemption and Cash Flow Matrix with a look ahead to the next two weeks of issuance and a recap of last week, click here.

• Belgium will kick off issuance for the week on Monday with a conventional auction of a combined E2.5-3.0bln (in line with our size estimate following the BDA’s increase of its OLO issuance target for 2025). The bonds on offer will be the 2.60% Oct-30 OLO (ISIN: BE0000365743), the 3.10% Jun-35 OLO (ISIN: BE0000363722) and the 3.50% Jun-55 OLO (ISIN: BE0000361700). We had expected the 10-year on-the-run line to be on offer.
• Germany will come to the market on Tuesday to look to sell E4.5bln of the 2.20% Oct-30 Bobl (ISIN: DE000BU25059).
• Italy on Wednesday will hold a 5/10-year BTP /CCTeu auction, selling E1.0-1.5bln of the 1.35% Apr-30 BTP (ISIN: IT0005383309), E1.5-2.0bln of the 2.70% Oct-30 BTP (ISIN: IT0005654642), E3.0-3.5bln of the 3.60% Oct-35 BTP (ISIN: IT0005648149) and E1.5-2.0bln of the 1.05% Apr-34 CCTeu (ISIN: IT0005652828).
• Belgium will come to the market on Friday with ORI Facility with details to be confirmed the preceding day.

NOMINAL FLOWS: This week sees E26.2bln of redemptions: E24.2bln from a formerly 5-year Spanish Bono and E1.9bln from a formerly 10-year SLOREP. Coupon payments for the week total E17.2bln of which E11.2bln are Spanish, E5.8bln are Italian and E0.2bln are from the EFSF. This leaves estimated net flows for the week at negative E26.4bln, down from last week’s positive E2.8bln.

• RES 4: 5575.00 High Mar 3 and a major resistance (cont) 
• RES 3: 5526.00 High Mar 19 / 20 (cont)
• RES 2: 5486.00/88.00 High May 20 and a bull trigger / High Jul 10
• RES 1: 5441.00 High Jul 24   
• PRICE: 5436.00 @ 06:34 BST Jul 28 
• SUP 1: 5292.00 Low Jul 22   
• SUP 2: 5281.00/5194.00 Low Jul 1 & 4 / Low Jun 23 and bear trigger
• SUP 3: 5138.00 High Apr 30 
• SUP 4: 5078.00 Low Apr 30  

The trend condition in Eurostoxx 50 futures remains bullish and short-term weakness for now, appears corrective. Support at 5281.00, the Jul 1 / 4 low, remains intact. A clear break of this level would strengthen a bearish threat. For bulls, a resumption of gains would refocus attention on key resistance and the bull trigger at 5486.00, the May 20 high. It has recently been pierced, a clear breach of it would resume the bull cycle and open 5500.00.

• RES 4: 0.8835 High May 3 2023  
• RES 3: 0.8800 Round number resistance
• RES 2: 0.8781 2.236 pro of the Mar 3 - 11 - 28 price swing
• RES 1: 0.8769 Intraday high
• PRICE: 0.8743 @ 06:47 BST Jul 28
• SUP 1: 0.8692/46 Low Jul 25 / 20- day EMA
• SUP 2: 0.8576 50-day EMA 
• SUP 3: 0.8540 Low Jun 30 
• SUP 4: 0.8508 Low Jun 27

The trend set-up in EURGBP is unchanged, it remains bullish and last week’s  climb reinforces this theme. A price sequence of higher highs and higher lows is intact and note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. The cross has breached key resistance at 0.8738, the Apr 11 high, strengthening a bull theme. Sights are on 0.8781, a Fibonacci projection. Initial firm support lies at 0.8646, the 20-day EMA.