BTP TECHS: (U5) In A Range

• RES 4: 151.21 High Mar 28
• RES 3: 150.49 High Apr 2  
• RES 2: 149.38 50.0% retracement of the Jan 10 - Apr 22 bear leg 
• RES 1: 147.95/149.18 High Jul 22 / 16 and the bull trigger 
• PRICE: 147.86 @ 06:59 BST Jul 28
• SUP 1: 146.76 20-day EMA
• SUP 2: 146.01/145.86 50-day EMA / Low Jul 24 
• SUP 3: 145.16 61.8% retracement of the Jul 1 - 16 bull cycle
• SUP 4: 144.21 76.4% retracement of the Jul 1 - 16 bull cycle  

A bull cycle in USDJPY remains in place, however, a corrective phase that started Jul 16 has resulted in a retracement from recent highs. Short-term pivot support to monitor is 146.01, the 50-day EMA. It has been pierced, a clear break of this average would signal scope for stronger reversal and open 145.16, a Fibonacci retracement. For bulls, the latest recovery opens 149.18, the Jul 16 high, a break of this hurdle would resume the uptrend.

Belgium, Germany and Italy look to hold auctions this week. We pencil in issuance of E17.0bln in the week, up from last week’s E10.8bln.

For the full MNI EGB Issuance, Redemption and Cash Flow Matrix with a look ahead to the next two weeks of issuance and a recap of last week, click here.

• Belgium will kick off issuance for the week on Monday with a conventional auction of a combined E2.5-3.0bln (in line with our size estimate following the BDA’s increase of its OLO issuance target for 2025). The bonds on offer will be the 2.60% Oct-30 OLO (ISIN: BE0000365743), the 3.10% Jun-35 OLO (ISIN: BE0000363722) and the 3.50% Jun-55 OLO (ISIN: BE0000361700). We had expected the 10-year on-the-run line to be on offer.
• Germany will come to the market on Tuesday to look to sell E4.5bln of the 2.20% Oct-30 Bobl (ISIN: DE000BU25059).
• Italy on Wednesday will hold a 5/10-year BTP /CCTeu auction, selling E1.0-1.5bln of the 1.35% Apr-30 BTP (ISIN: IT0005383309), E1.5-2.0bln of the 2.70% Oct-30 BTP (ISIN: IT0005654642), E3.0-3.5bln of the 3.60% Oct-35 BTP (ISIN: IT0005648149) and E1.5-2.0bln of the 1.05% Apr-34 CCTeu (ISIN: IT0005652828).
• Belgium will come to the market on Friday with ORI Facility with details to be confirmed the preceding day.

NOMINAL FLOWS: This week sees E26.2bln of redemptions: E24.2bln from a formerly 5-year Spanish Bono and E1.9bln from a formerly 10-year SLOREP. Coupon payments for the week total E17.2bln of which E11.2bln are Spanish, E5.8bln are Italian and E0.2bln are from the EFSF. This leaves estimated net flows for the week at negative E26.4bln, down from last week’s positive E2.8bln.

• RES 4: 5575.00 High Mar 3 and a major resistance (cont) 
• RES 3: 5526.00 High Mar 19 / 20 (cont)
• RES 2: 5486.00/88.00 High May 20 and a bull trigger / High Jul 10
• RES 1: 5441.00 High Jul 24   
• PRICE: 5436.00 @ 06:34 BST Jul 28 
• SUP 1: 5292.00 Low Jul 22   
• SUP 2: 5281.00/5194.00 Low Jul 1 & 4 / Low Jun 23 and bear trigger
• SUP 3: 5138.00 High Apr 30 
• SUP 4: 5078.00 Low Apr 30  

The trend condition in Eurostoxx 50 futures remains bullish and short-term weakness for now, appears corrective. Support at 5281.00, the Jul 1 / 4 low, remains intact. A clear break of this level would strengthen a bearish threat. For bulls, a resumption of gains would refocus attention on key resistance and the bull trigger at 5486.00, the May 20 high. It has recently been pierced, a clear breach of it would resume the bull cycle and open 5500.00.