BUND TECHS: (U5) Tops 50-day EMA

Germany and Portugal look to hold auctions today while Italy looks to come to the market Friday. Already this week, the EU has held a syndication, while the Netherlands, Austria and Germany held auctions. We pencil in estimated gross issuance for the week of E30.2bln, up from E29.1bln last week.

For the full MNI EGB Supply Daily publication with a look ahead to the next two weeks of issuance and a recap of issuance so far this week and Q3 issuance plans, click here.

• Germany will return to the market today to hold a 15-year Bund auction. E1.5bln of the on-the-run long 15-year 2.60% May-41 Bund ISIN (DE000BU2F009) will be on offer alongside E1.0bln of the 2.50% Jul-44 Bund (ISIN: DE0001135481).
• Portugal will also come to the market today with a combined E1.00-1.25bln of the long 6-year 0.30% Oct-31 OT (ISIN: PTOTEOOE0033) on offer alongside the off-the-run short 30-year 1.00% Apr-52 OT (ISIN: PTOTECOE0037).
• Italy will look to hold a 3/7/15+ year BTP auction on Friday, selling E3.25-3.50bln of the new long 3-year 2.35% Jan-29 BTP (ISIN TBA; the launch was as expected) alongside a reopening of the on-the-run 7-year 3.25% Jul-32 BTP (ISIN: IT0005647265) for E3.0-3.5bln and E1.25-1.75bln of the on-the-run 15-year 3.85% Oct-40 BTP (ISIN: IT0005635583).
  • The launch of a new 3-year BTP was expected at this auction. This will also be the first reopening of the 15-year 3.85% Oct-40 BTP since its syndicated launch for E13.0bln in February.

• RES 4: 0.8781 2.236 pro of the Mar 3 - 11 - 28 price swing 
• RES 3: 0.8738 High Apr 11 high and a key resistance
• RES 2: 0.8694 High Apr 14 
• RES 1: 0.8670 High Jul 02
• PRICE: 0.8621 @ 06:48 BST Jul 9
• SUP 1: 0.8597 Low Jul 7 
• SUP 2: 0.8562/8511 20- and 50-day EMA values 
• SUP 3: 0.8459 Low Jun 11
• SUP 4: 0.8407 Low Jun 4

The trend condition in EURGBP remains bullish and the cross is holding on to the bulk of its recent gains. Recent activity appears to be a bull flag formation - a bullish continuation pattern. 0.8648, 76.4% of the Apr 11 - May 29 downleg, has been pierced. A continuation higher and a confirmation of the flag would strengthen bullish conditions and open 0.8738, the Apr 11 high and a key resistance. Support to watch lies at 0.8562, the 20-day EMA.

• RES 4: 107.690 High Apr 30 
• RES 3: 107.610 High May 23 and a key near-term resistance
• RES 2: 107.430/475 High Jun 13 / High May 27
• RES 1: 107.277/365 20-day EMA / High Jul 7  
• PRICE: 107.215 @ 06:29 BST Jul 9
• SUP 1: 107.195/180 Low Jun 6 / 23    
• SUP 2: 107.125 Low May 12 and a key support
• SUP 3: 107.000 Round number support 
• SUP 4: 106.890 2.000 proj of the May 23 - 29 - 30 price swing

Schatz futures have traded lower this week but for now remain inside a range. Support to watch is 107.195, the Jun 6 low. It has been pierced, a clear break of it would reinstate a bearish threat and signal scope for an extension towards 107.125, the May 12 low. On the upside, clearance of 107.470, the May 30 high, is required to strengthen a bullish condition. Initial firm resistance is 107.365, the Jun 7 high.