POWER: Nordic Forward Curve Could Trade Lower Once Liquid

France, Austria, Italy and Greece are due to sell bills next week. We expect issuance of E18.5bln, down from E20.3bln this week.

• On Tuesday morning, Austria will look to sell E2.5bln of the new 3-month Aug 27, 2026 Green ATB.
• On Tuesday afternoon, France will look to issue E0.2-0.6bln of the 11-week Aug 12, 2026 BTF, E2.9-3.3bln of the new 14-week Sep 2, 2026 BTF, E1.8-2.2bln of the 25-week Nov 18, 2026 BTF and E1.6-2.0bln of the 51-week May 20, 2027 BTF.
• On Wednesday morning, Italy will look to come to the market with E7.5bln of the new 6-month Nov 30, 2026 BOT on offer.
• Also on Wednesday morning, Greece will look to sell E400mln of the new 26-week Nov 27, 2026 GTB.

See the full document here 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's issuance.

The ESM is likely to hold a syndication in the upcoming week while Belgium, Italy, Germany and Finland will all look to hold auctions. We look for gross issuance of E35.6bln for the week, down from E44.9bln this week. We pencil in a Spanish 10-year syndication as well as potential transactions from Greece and Portugal.

• The ESM has sent an RfP (Request for Proposal) regarding an upcoming transaction, subject to market conditions. That means a syndicated transaction early next week is likely.
• Spain: We look for the second 10-year syndicated launch in late May / early June with a transaction size of E10-13bln expected. Our base case is for the upcoming week (W/C 25 May) ahead of the upcoming formerly long 3-year Bono redemption and in line with the timing seen in both of the previous two years.
• Belgium will kick off issuance for the week on Monday with a conventional auction for a combined E1.3-1.7bln. Due to the recent syndication, the BDA announced in advance that the size of the auction would be smaller than normal. The 3.40% Jun-36 OLO (ISIN: BE0000366758) will be on offer alongside the 3.45% Jun-43 OLO (ISIN: BE0000359688).
• Italy will come to the market on Tuesday to hold a BTP Short Term / BTPei auction. On offer will be E2.25-2.50bln of the on-the-run 2.20% Feb-28 BTP Short Term (ISIN: IT0005692410), E1.0-1.5bln of the 1.10% Aug-31 BTPei (ISIN: IT0005657348) and E0.75-1.00bln of the 2.25% Feb-46 BTPei (ISIN: IT0005706293).

• RES 3: 95.900 - High Jan 8 and a key short-term resistance  
• RES 2: 95.653 - 23.6% retracement Oct - Mar Downleg (cont)
• RES 1: 95.480 - High May 21
• PRICE: 95.425 @ 16:11 BST May 22
• SUP 1: 95.195 - Low Apr 28
• SUP 2: 95.035 - Low Mar 22
• SUP 3: 94.377 - 1.0% 10-dma envelope

The break back above the 50-dma proved short-lived, with prices fading again into the weekly close. Any additional progress above the 50-dma opens 95.653, the 23.6% retracement for the downleg posted off the October high on the continuation contract. While the bear mode set-up in MA studies is highlighting a dominant downtrend, moves this week are highlighting the risk of a near-term correction higher. Any weakness through year-to-date lows at 95.560 would prompt further downside from here, opening vol-band support into 94.362.