EUROPEAN INFLATION: Spain HICP Preview: Energy Base Effect To Push Headline Up

• USD2bln WNG of the new 5-year Sep-30 ESM-Bond
• Spread set earlier at SOFR MS+39 (SA 30/360) (guidance was SOFR+40 Area, IPT was MS+42 area, that was equiv. to CT5 + ~7.3bp)
• Books closed in excess of $13.3bn excl. JLM interest
• Issuer: European Stability Mechanism (TICKER: ESM)
• Issuer Ratings: Aaa (stable) (Moody's) / AAA (stable) (S&P) / AAA (stable) (Fitch)/ AAA (stable) (Scope)
• Format: Registered Notes, Reg S (NSS) / 144A
• Ranking: Senior, Unsecured, Unsubordinated
• Listing: Luxembourg
• Settlement: 4 September 2025 (T+6 (TARGET) / T+5 (NY))
• Maturity Date: 4 September 2030 (5Y)
• HR 101% vs CT5 (T 3 ⅞ 07/31/30 )
• ISIN: Reg S: XS3171756128 / 144A: US29881WAG78
• Coupon: Fixed, Semi-annual, 30/360, Following, Unadjusted
• Bookrunners: CACIB(DM/B&D) / DB / JPM
• Timing: Hedge deadline 15.30CET / 14.30UKT / 9.30EST

The transaction comes ahead of a USD3bln redemption for the ESM in September. That line also had a 5-year maturity initially.

• RES 4: 1.1851 High Sep 10 2021
• RES 3: 1.1829 High Jul 01 and the bull trigger 
• RES 2: 1.1789 High Jul 24 
• RES 1: 1.1743 High Aug 22
• PRICE: 1.1586 @ 14:43 BST Aug 27
• SUP 1: 1.1574/1.1528 Intraday low / Low Aug 5 
• SUP 2: 1.1392 Low Aug 1 and bear trigger 
• SUP 3: 1.1373 Low Jun 10 
• SUP 4: 1.1313 Low May 30 

The trend set-up in EURUSD remains bullish and short-term weakness is for now considered corrective. However, the pair is trading lower today and has pierced key support at the 50-day EMA, at 1.1599. A clear break of the average would signal scope for a deeper retracement and potentially expose key M/T support at 1.1392, the Aug 1 low. For bulls, a resumption of gains would open key resistance and the bull trigger at 1.1829, the Jul 1 high. 

• -5,000 TUZ5 104-07, post time bid at 0937:01ET, 104-07.12 last -0.5)