EUROZONE T-BILL ISSUANCE: W/C 20 October

Austria, Greece and Italy are still due to sell bills this week, while Germany and France came to the market yesterday. We expect issuance to be E21.6bln in first-round operations, up from E19.1bln last week.

• This morning, Austria will look to come to the market with E1bln of the 4-month Jan 29, 2026 ATB and E1.25bln of the new 6-month Mar 26, 2026 green ATB.
• Tomorrow morning, Greece will look to sell E500mln of the new 26-week Mar 27, 2027 GTB.
• Finally on Thursday morning, Italy will look to hold a BOT auction, with E6.5bln of the new 6-month Mar 31, 2026 BOT on offer. 

Market Summary:  The Hang Seng fell yesterday on BYD news and is lower again today by -0.96%. The CSI 300 is down -1.19%, the Shanghai Comp down -1.23% and the Shenzhen Comp down -2.27%.  The Yuan Reference Rate at 7.1057 Per USD; Estimate 7.1087 and the CGB 10-Yr a touch higher in yield at 1.80%

• China may have scope to lower its loan rates before the end of the year to stimulate domestic demand, following recent rate cuts by the US Federal Reserve that have eased pressure on the yuan, although any monetary easing is likely to be constrained by narrowing bank profit margins, Shanghai Securities News reports, citing analysts.  The Fed’s latest rate cut has created a more accommodative global liquidity environment, potentially giving China greater flexibility in adjusting its monetary policy  (source Shanghai Securities News)
• Several Chinese southern cities have implemented preventive measures, such as suspending work and schools, to prepare for the arrival of super typhoon Ragasa.  Dongguan, Jiangmen, Shantou, Zhuhai, and Yangjiang in Guangdong province, as well as Haikou in Hainan province, yesterday announced they would implement the 'Five Stop' measures, which are suspending classes, halting work, ceasing production, stopping transportation services, and closing businesses.  (source Yicai)

• RES 4: 107.240 High Aug 4 
• RES 3: 107.225 High Aug 27 and the bull trigger 
• RES 2: 107.145/190 High Sep 11 / High Sep 5 and 8
• RES 1: 107.050 Low Aug 25 and Sep 2 and a recent breakout level 
• PRICE: 106.985 @ 06:16 BST Sep 23
• SUP 1: 106.955 Low Sep 22  
• SUP 2: 106.948 1.382 proj of the the Aug 27 - Sep 2 - 8 price swing  
• SUP 3: 106.928 1.500 proj of the the Aug 27 - Sep 2 - 8 price swing
• SUP 4: 106.900 Round number support

The trend structure in Schatz futures remains bearish and recent weakness confirms a resumption of the downtrend. The contract has breached support at 107.050, the Aug 25 and Sep 2 low plus a bear trigger. Price has also traded to a fresh short-term cycle low today. This maintains the downward price sequence of lower lows and lower highs. Sights are on 106.948 next, a Fibonacci projection. Initial resistance is at 107.050, Aug 25 and Sep 2 low