PHP: USD/PHP Makes Fresh Record High Before Sharp Retracement

• RES 4: 5600.00 Round number resistance 
• RES 3: 5575.00 High Mar 3 (cont.) and a key resistance  
• RES 2: 5564.82 0.764 proj of the Aug 1 - 22 - Sep 2 price swing 
• RES 1: 5539.00 Intraday high      
• PRICE: 5539.00 @ 06:40 BST Sep 29
• SUP 1: 5433.67/5366.00 20-day EMA / Low Sep 17
• SUP 2: 5302.00 Low Sep 2 and a key short-term support  
• SUP 3: 5262.18 76.4% retracement of the Aug 1 - 22 bull leg   
• SUP 4: 5181.00 Low Aug 1 and key support  

Eurostoxx 50 futures have started the week on a bullish note. Today’s gains have resulted in a breach of key resistance and the bull trigger at 5525.00, the Aug 22 high. The break confirms a resumption of the uptrend and paves the way for a climb towards 5564.82, a Fibonacci projection. Moving average studies remain in a bull-mode position, highlighting a dominant uptrend. Initial firm support lies at 5433.67, the 20-day EMA.

JPY demand and JGB weakness as BoJ board member Noguchi notes that the need for adjustments to the Bank’s policy rate is “heightening more than ever before”, stressing that upside inflation risks outweigh downside risks, creating the need for a new perspective when it comes to policymaking.

• Noguchi also notes that the Bank needs to conduct policy in a flexible manner, with it being vital to adjust the Bank’s policy settings at the right time.
• A mention of downside economic risks stemming from U.S. tariffs limits the hawkish follow through in markets.
• USD/JPY trades to a fresh session low at 148.75, First support seen at the Sep 22 high (147.38). The bullish technical theme in the pair remains intact.
• JGB futures sold off ~15 ticks from session highs but trade above Tokyo lows (135.93 last vs. session lows of 135.84). Bears remain in technical control, with first support at the September 26 low (135.67).

See the full document here for a look ahead to the next two weeks of issuance, a recap of last week and a summary of Q4 issuance updates.

Germany, Spain and France are all scheduled to hold auctions this week. We pencil in issuance of E22.9bln for the week, down from E41.2bln last week. We also expect to receive the Q4 funding plans from Finland (we pencil in two bond auctions with syndications for the year completed), Ireland (0-1 auctions) and Portugal (we expect only exchange auctions for the remainder of the year unless there are buybacks).

• Germany will kick off Q3 issuance on Wednesday with E5bln of the 10-year 2.60% Aug-35 Bund (ISIN: DE000BU2Z056) on offer.
• Spain will look to hold a Bono / Obli / ObliEi auction on Thursday. The on-the-run 2.70% Jan-30 Bono (ISIN: ES0000012O00) will be on of offer alongside the new long 7-year 3.00% Jan-33 Obli (ISIN: ES0000012P74) and the 1.00% Jul-42 Green Obli (ISIN: ES0000012J07). The 1.15% Nov-36 Obli-Ei (ISIN: ES0000012O18) will also be on offer. The auction size will be confirmed today.
• France will conclude the week’s issuance on Thursday with a LT OAT auction. A first reopening of the 10-year 3.50% Nov-35 OAT (ISIN: FR0014012II5), the off-the-run 1.25% May-36 OAT (ISIN: FR0013154044), the 0.50% Jun-44 Green OAT (ISIN: FR0014002JM6) and the 4.00% Apr-60 OAT (ISIN: FR0010870956) will be on offer.
  • Note that the green OAT issuance cap for 2025 is E11bln and so far E7.43bln has been sold. There is a limit for the 0.50% Jun-44 Green OAT being sold at this auction, but based on recent auctions we don’t think that would be challenged anyway. Depending on the allocation at this auction this is likely to be the final or the penultimate green OAT on offer this year.

NOMINAL FLOWS: This week will see a redemption of E15.5bln from a BTP Short Term. Coupon payments total E3.5bln of which E3.2bln are Italian. This leaves estimated net flows for the week at positive E3.9bln, versus positive E31.1bln last week.