EUROZONE T-BILL ISSUANCE: W/C 3 November
The EU is still scheduled to sell bills this week, while Germany, the Netherlands, France, Spain, Belgium and the ESM have already come to the market. We expect issuance to be E27.3bln in first round operations, up from E13.9bln last week.
- To conclude issuance for the week today, the EU will look to sell up to E1.0bln of the 3-month Feb 6, 2026 EU-bill, up to E1.0bln of the 6-month May 8, 2026 EU-bill and up to E1.5bln of the new 12-month Nov 6, 2026 EU-bill.
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OAT: Fresh Session Low For Futures As Faure Comments Get Wider Attention
OAT futures briefly take another leg lower as comments from Socialist Leader Faure get more widespread attention.
- The contract reached a session low of 121.00, matching last Wednesday's low, before recovering to 121.12 at typing (-43 ticks today).
- A reminder that Lecornu will provide an address to the National Assembly tomorrow, which risks a censure vote.
OAT: OAT/Bunds Set For Widest Close Since January
Ongoing/heightened domestic & political risks stemming from the lack of clear avenues to resolve the French Budget situation pressure OATs this morning, OAT/Bund spread ~3.5bp wider at 84.5bp, on track for the highest close since January 13 (84.8bp the target there).
- PM Lecornu has stressed that he will not use article 49.3, while seemingly looking to implement extra taxes on super high earners),
- Fresh headlines from French Socialist leader Faure note that he doesn't see how the party could not vote against the government in a confidence vote, add further widening pressure.
- Against this backdrop Commerzbank note that “Lecornu's efforts to find consensus on a 2026 budget remain an uphill struggle ahead of tomorrow's key address, with latest headlines suggesting a wealth-tax and additional income tax on the wealthy to win support from left-leaning lawmakers. The clock is ticking though as Lecornu has to present a budget to parliament by 13 October. With rising odds for no agreement and rating risks looming over coming weeks, we would stay away from OAT risk for now”.
WTI TECHS: (X5) Bear Mode Condition
- RES 4: $76.89 - 2.764 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $74.79- 2.500 proj of the Apr 9 - 23 - May 5 price swing
- RES 2: $73.39 - High Jun 23 and a bull trigger
- RES 1: $66.42/68.43 - High Sep 29 and key resistance / High Jul 30
- PRICE: $61.56 @ 07:21 BST Oct 6
- SUP 1: $60.40 - Low Oct 2
- SUP 2: $57.50 - Low May 30
- SUP 3: $54.89 - Low May 5
- SUP 4: $54.10 - Low Apr 9 and a key support
WTI futures remain in a bear-mode condition. Last week’s sell-off resulted in a move through key support and the bear trigger at $60.85, the Aug 13 low. Clearance of this level strengthens a bearish theme and paves the way for an extension towards $57.50, the May 30 low. Initial firm resistance has been defined at $66.42, the Sep 29 high. Clearance of this level would highlight a reversal.
