EURGBP TECHS: Support Remains Exposed

The EFSF is likely to hold a syndication today while the Netherlands will hold a conventional auction and the EU will hold the non-competitive round for its auction. Italy and Germany will hold auctions later in the week. Yesterday, the EU and Belgium held auctions. We look for gross issuance of E27.5bln for the week, up from E13.6bln last week.

For the full document with a look ahead to issuance through the remainder of this week and next week click here.

• The EFSF has sent a mandate for a syndicated transaction for a new 7-year Sep-33 bond (ISIN: EU000A2SCAZ3). The transaction is expected to be launched and priced in the near future, subject to market conditions. This means a transaction today is likely. We look for a E3bln transaction size, in line with most 7-year EFSF issues over the past few years.
• The Netherlands will come to the market this morning, looking to sell E1.0-1.5bln of the 3.75% Jan-42 DSL (ISIN: NL0009446418) via a conventional auction.

The previously flagged risk-off price action seemingly stems from a tweet from a Pakistani reporter noting that "Contrary to reports in Indian press, Iran’s Foreign Minister is NOT returning to Pakistan following his Russia visit -- Indian press reports are fake news -- Iran’s negotiating team is currently in consultation mode and will return when there to Islamabad, soon, when they think there is headway in talks."

Italy, Austria and Greece are still due to sell bills this week, while France has already come to the market. We expect issuance of E14.9bln, down from E18.1bln last week.

• This morning, Italy  will look to issue E2.5bln of the 3-month Jul 14, 2026 BOT and E2.0bln of the 5-month Sep 30, 2026 BOT.
• Also this morning, Austria will look to come to the market with E1.0bln of the 3-month Jul 30, 2026 ATB and E1.0bln of the new 6-month Oct 10, 2026 ATB.
• Finally tomorrow morning, Greece  will look to sell E0.4mln of the new 13-week Jul 31, 2026 GTB.