THAILAND: Ruling Coalition Loses Majority, Bhumjaithai Edges Ahead In PM Race

• RES 4: 6523.63 1.764 proj of the May 23 - Jun 11 - 23 price swing 
• RES 3: 6500.00 Round number resistance
• RES 2: 6477.31 1.618 proj of the May 23 - Jun 11 - 23 price swing
• RES 1: 6468.50 High Jul 31 and the bull trigger      
• PRICE: 6269.25 @ 14:47 BST Aug 1  
• SUP 1: 6264.25 Intraday low  
• SUP 2: 6288.25 Low Jul 17    
• SUP 3: 6241.00 Low Jul 16
• SUP 4: 6189.50 50-day EMA 

The trend set-up in S&P E-Minis remains bullish and short-term weakness is considered corrective. Note that the contract has traded through support at the 20-day EMA, at 6336.64. The breach signals scope for a deeper retracement and opens the 50-day EMA at 6189.50. Clearance of this average is required to signal a stronger reversal. The  primary trend remains up, key short-term resistance and the bull trigger is 6468.50, the Jul 31 high.

• Spain will come to the market on Thursday to hold a Bono/Obli/ObliEi auction. On offer will be the on-the-run 3-year 2.40% May-28 Bono (ISIN: ES0000012O59), the on-the-run 10-year 3.20% Oct-35 Obli (ISIN: ES0000012P33) and the short 20-year 3.45% Jul-43 Obli (ISIN: ES0000012K95) alongside the 1.00% Nov-30 Obli-Ei (ISIN: ES00000127C8). The auction size will be confirmed on Monday.
  • As we also expected in the announcement, the auction scheduled for 21 August was cancelled (in line with precedent in recent years).
• France will conclude issuance for the week, also on Thursday by holding a LT OAT auction for E8.5-10.5bln. This is a slightly smaller auction than the E10-12bln range we have seen recently (expected, given that it is August) but what is perhaps a bit less expected is that all of the OATs on offer are off-the-run issues: the 1.25% May-34 OAT (ISIN: FR0013313582), the 1.25% May-36 OAT (ISIN: FR0013154044), the 0.50% May-40 OAT (ISIN: FR0013515806) and the 4.00% Apr-55 OAT (ISIN: FR0010171975).

NOMINAL FLOWS: The upcoming week sees E0.7bln of redemptions, of which E0.6bln is from a formerly 3-year LithGB, while coupon payments total just E0.2bln. This leaves estimated net flows for the week at positive E24.4bln, versus negative E26.2bln this week.

Austria, Germany, Spain and France look to hold auctions in the upcoming week. We pencil in issuance of E25.4bln, up from E17.2bln this week.

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

• Austria will kick off issuance for the week on Tuesday with an RAGB auction, selling a combined E1.4375bln of the 2.90% Feb-33 RAGB (ISIN: AT0000A324S8) and the on-the-run 10-year 2.95% Feb-35 RAGB (ISIN: AT0000A3HU25).
• Germany will also hold an auction on Tuesday with E5bln of the 1.90% Sep-27 Schatz (ISIN: DE000BU22106) on offer.
• Germany will return to the market on Wednesday to hold a 15-year Bund auction. On offer will be E1.5bln of the 1.00% May-38 Bund (ISIN: DE0001102598) alongside E1.0bln of the 3.25% Jul-42 Bund (ISIN: DE0001135432).