AUTOMOTIVE: Traton (TRAGR Baa2[P]/BBB/NR): 1Q25 Headlines

• RES 4: 5611.50 2.500 proj of the Nov 21 - Dec 9 - 20 ‘24 price swing
• RES 3: 5606.00 3.000 proj of the Dec 20 ‘24 - Jan 8 - 13 price swing
• RES 2: 5600.00 Round number resistance   
• RES 1: 5439.29/5575.00 20-day EMA / High Mar 3 and the bull trigger             
• PRICE: 5419.00 @ 06:43 GMT Mar 11 
• SUP 1: 5332.00 Intraday low               
• SUP 2: 5309.38 50-day EMA 
• SUP 3: 5249.00 Low Feb 5    
• SUP 4: 5185.00 Low Feb 4     

The trend in the Eurostoxx 50 futures contract is unchanged, it remains bullish and the latest pullback appears corrective. Support at the 50-day EMA, at 5309.38, remains intact for now. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend.  However, a clear break of the 50-day EMA would signal a possible reversal. A resumption of gains would refocus attention on the 5600.00.

• On Thursday, Italy will hold a 3/7 and 15-50-year BTP auction. On offer will be E3.5-4.0bln of the new 3-year 2.65% Jun-28 BTP (ISIN: IT0005641029) while in the 7-year area E1.25-1.50bln of the 4.00% Oct-31 BTP Green (ISIN: IT0005542359) will be sold alongside E0.75-1.25bln of the off-the-run 8-year 2.45% Sep-33 BTP (ISIN: IT0005240350). Alongside these E1.25-1.5bln of the on-the-run 30-year 4.30% Oct-54 BTP (ISIN: IT0005611741) will be on offer.
  • We had thought that a 7-year BTP launch was more likely than a 3-year launch here (albeit we hadn’t ruled out the new 3-year issue). With the current on-the-run 7-year 3.15% Nov-31 BTP not being on offer this week, we think that the probability of a new 7-year BTP being part of a dual-tranche syndication (potentially alongside a 30-year BTPei issue) have increased in the coming weeks.

The EU will hold its scheduled syndication today, whilst Germany, Portugal and Italy are all due to hold auctions this week. We look for estimated gross issuance for the week of E26.6bln, down from E47.3bln (ex-retail operations) last week.

For the full document including more details on issuance this week and next week click here.

• The EU announced a mandate for a new 10-year EU-bond maturing 12th December 2035. The transaction will be launched today, subject to market conditions.
  • Note that the last 10-year EU-bond launch at syndication (Feb 2024) saw E7bln sold. We see upside risks to this and pencil in E7-10bln (although think it's likely we see the bottom half of this range).
• Also today, Germany will sell E4.5bln of the 2.20% Mar-27 Schatz (ISIN: DE000BU22080).
• Tomorrow, Germany will return to the market to issue E4.5bln of the 10-year 2.50% Feb-35 Bund (ISIN: DE000BU2Z049).
• Also tomorrow, Portugal will hold an OT auction for a combined E1.00-1.25bln. On offer will be the first reopening of the recently launched on-the-run 10-year 3.00% Jun-35 OT (ISIN: PTOTEAOE0005) alongside the 3.50% Jun-38 OT (ISIN: PTOTEZOE0014).