BTP TECHS: (U5) Bear Cycle Intact
- RES 4: 122.35 2.500 proj of the May 14 - 20 - 21 price swing
- RES 3: 122.00 Round number resistance
- RES 2: 121.73 High Jun 13 and the bull trigger
- RES 1: 120.46 50-day EMA
- PRICE: 119.92 @ Close Sep 4
- SUP 1: 119.26 Low Sep 3
- SUP 2: 118.87 Low May 21
- SUP 3: 118.51 Low May 14 and key support
- SUP 4: 118.24 1.618 proj of the Jun 13 - Jul 25 - Aug 5 price swing
The primary trend condition in BTP futures is unchanged and the direction remains up. However, for now, a bear cycle is in play. The move down this week reinforces current short-term conditions. The contract has traded through a key support at 119.59, the Jul 25 low. The clear break of this level highlights a range breakout and reinforces a bear cycle. This opens 118.87, the May 21 low. Initial firm resistance is at 120.46, the 50-day EMA.
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EUROZONE ISSUANCE: EGB Supply
Austria, Germany, Spain and France look to hold auctions this week. We pencil in issuance of E24.7bln, up from E17.2bln last week.
- Austria will kick off issuance for the week today 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 today with E5bln of the 1.90% Sep-27 Schatz (ISIN: DE000BU22106) on offer.
- Germany will return to the market tomorrow 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).
EUROZONE T-BILL ISSUANCE: W/C 4 August
Spain, Belgium, Finland and the ESM are due to sell bills today and the EU tomorrow while Germany, the Netherlands and France already came to the market yesterday. We expect issuance to be E28.2bln in first round operations, up from E14.2bln last week.
- This morning, Spain will look to sell 6-month Feb 6, 2026 letras alongside new 12-month Aug 7, 2026 letras. The auction size will be confirmed this afternoon.
- Belgian will then come to the market to sell a combined E2.6-3.0bln of the 3-month Nov 13, 2025 TC, the 6-month Feb 12, 2026 TC and the 11-month Jul 9, 2026 TC.
- Finland will look to sell up to a combined E2bln of the 6-month Feb 13, 2026 RFTB and the 9-month May 13, 2026 RFTB.
- The ESM will conclude today's bill issuance with up to E1.1bln of the new 3-month Nov 6, 2025 bills on offer.
- Tomorrow, the EU will bring the week's bill issuance to an end with up to E1.0bln of the 3-month Nov 7, 2025 EU-bill, up to E1.0bln of the 6-month Feb 6, 2026 EU-bill and up to E1.5bln of the new 12-month Aug 7, 2026 EU-bill on offer.
ASIA STOCKS: Strong Day for Most Bourses
Major Asian bourses continued in a positive mood today on hopes that US rate cuts might be forthcoming. With earnings strong thus far markets continue to be bought on dips despite high valuations.
- The NIkkei had a strong day rising +0.58% after yesterday's falls.
- China's bourses were all up with the Hang Seng by +0.59%, CSI 300 +0.55%, Shanghai up +0.70% and Shenzhen up +0.50%.
- The TAIEX in Taiwan is up strongly by +1.05%
- The KOSPI rallied +1.50% after weak CPI brought rate cuts back on the table.
- The FTSE Malay KLCI is up +0.35% and the Jakarta Composite up strongly by +0.96%.
- The Straits Times rose +0.44% and the PSEi in the Philippines just +0.14%.
- The NIFTY 50 is not following regional trends, down -0.45% at the open.
