HEALTHCARE: Stryker (SYK: A3/BBB+): Moody’s Upgrade

Germany, Finland, Spain and France are all due to hold auctions this week. The EFSF held a syndication yesterday while Slovakia and the EU yesterday held an auction. We pencil in estimated gross issuance for the week of E36.7bln, up from E34.3bln last week.

For the full document with a recap of issuance so far this week and a look ahead to the rest of this week's and next week's issuance, click here.

• Today will see Germany come to the market to hold a Green auction. On offer will be E1bln of the 0% Aug-30 Green Bund (ISIN: DE0001030708) alongside E1bln of the 1.80% Aug-53 Green Bund (ISIN: DE0001030757) at that auction.
• Finland will also hold a conventional auction today with a combined up to E1.5bln of 7/10-year RFGBs on offer of the 1.50% Sep-32 RFGB (ISIN: FI4000523238) and the 3.00% Sep-35 RFGB (ISIN: FI4000587415).
  • This will be the first reopening of the 3.00% Sep-25 RFGB after its launch via syndication last month.

• RES 4: 150.49 High Apr 2   
• RES 3: 149.28 High Apr 3
• RES 2: 148.54/65 76.4% of Mar 28 - Apr 22 bear leg / High May 12
• RES 1: 146.23 50-day EMA 
• PRICE: 144.46 @ 06:47 BST May 20
• SUP 1: 144.27/143.45 50.0% of Apr 22 - May 12 bull leg / Low May 8      
• SUP 2: 142.36 Low May 6 
• SUP 3: 141.96 76.4% retracement of the Apr 22 - May 12 bull leg  
• SUP 4: 139.89 Low Apr 22 and a bear trigger

USDJPY continues to trade below the May 12 high and the pair maintains a softer tone. The latest pullback signals the end of the corrective cycle since Apr 22. A stronger reversal lower would expose 142.36, the May 6 low. Note that the 20-day EMA, at 145.18, has been cleared. The breach strengthens a bearish theme. Key short-term resistance has been defined at 148.65, the May 12 high.

The AUD/NZD cross sits back near 1.0840 in latest dealings around session lows. This puts us back under the 20-day EMA, see the chart below. Recent highs were marked at around the 100-day EMA, close to 1.0920.. The earlier RBA cut, along with trimmed inflation and growth forecasts has weighed on the cross in latest dealings. RBA Bullock also stated the RBA considered a 50bps cut, which has weighed further on the AUD. Downside focus for the pair may rest with a test back under 1.0800 (note earlier May lows in the pair were at 1.0760). 

• The AU-NZ 2yr spread is back off recent highs last near +27bps. We were around +45bps close to a week ago. 

Fig 1: AUD/NZD Versus Key EMAs 

Source: MNI - Market News/Bloomberg