EUROZONE T-BILL ISSUANCE: W/C 4 August
Aug-01 16:27
Germany, the Netherlands, France, Spain, Belgium, Finland, the ESM and the EU are due to sell bills next week. We expect issuance to be E27.9bln in first round operations, up from E14.2bln this week.
- Germany will kick off bill issuance for the week on Monday with E3bln of the 6-month Feb 18, 2026 Bubill on offer.
- Also Monday morning, the Netherlands will look to sell E0.5-1.5bln of the 4-month Nov 21, 2025 DTC alongside E1.0-2.0bln of the new 6-month Jan 29, 2026 DTC.
- On Monday afternoon, France will offer up to E7.2bln of 14/27/33/49-week BTFs: E2.6-3.0bln of the new 14-week Nov 12, 2025 BTF, E1.4-1.8bln of the 27-week Feb 11, 2026 BTF, E0.0-0.4bln of the 33-week Jul 15, 2026 BTF and E1.6-2.0bln of the 49-week Jul 15, 2026 BTF.
- On Tuesday, Spain will look to sell 6-month Feb 6, 2026 letras alongside new 12-month Aug 7, 2026 letras. The auction size will be confirmed on Monday.
- Belgian will then come to the market to sell a combined E2.6-3.0bln of the 3-month Nov 13, 2025 TC, the 6-month Feb 12, 2026 TC and the 11-month Jul 9, 2026 TC.
- Finland will look to sell up to a combined E2bln of the 6-month Feb 13, 2026 RFTB and the 9-month May 13, 2026 RFTB.
- The ESM will conclude Tuesday's bill issuance with up to E1.1bln of the new 3-month Nov 6, 2025 bills on offer.
- On Wednesday, the EU will bring the week's bill issuance to an end with up to E1.0bln of the 3-month Nov 7, 2025 EU-bill, up to E1.0bln of the 6-month Feb 6, 2026 EU-bill and up to E1.5bln of the new 12-month Aug 7, 2026 EU-bill on offer.
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US TSYS: Midday Update: Extending Lows
Jul-02 16:13
- Treasuries are extending midday lows currently, no obvious headline driver, more flow driven amid robust volumes (TYU5 over 1.2M).
- The Sep'25 10Y contract trades -10 at 111-17.5, session and 1W lows at the moment. First key support to watch is 111.07.5, the 20-day EMA.
- Curves remain steeper but off highs: 2s10s +4.251 at 50.964 (52.814H), 5s30s +3.403 at 96.167 (98.661H).
- Cross asset: Bbg US$ index off midmorning high: 1190.19 (+0.68), stocks mildly firmer (SPX eminis +15.00 at 6263.75, crude firmer (WTI +1.0 at 66.45), Gold firmer at 3345.58.
FOREX: GBP Under Significant Pressure as Political Uncertainty Ramps Up
Jul-02 16:12
- Political uncertainty in the UK heavily weighed on sterling Wednesday, as markets speculated that Rachel Reeves’ term as Chancellor of the Exchequer might be coming to an end. Prime Minister Sir Keir Starmer refused to publicly back his Chancellor, in a testing session of PMQs in the House of Commons, heightening the market’s fiscal concerns.
- GBPUSD remains roughly 1% lower on the session as we approach the APAC crossover, having traded as low as 1.3563 amid the tumult, during which the 30-yr gilt yield rose as much as 22bps at its extreme. 20-day EMA support was pierced below 1.3586 and a sustained break of this average would signal scope for a more pronounced corrective pullback. The 50-day, which has supported dips well in recent months, intersects at 1.3439.
- For EURGBP, this week’s gains are reinforcing current bullish conditions. 0.8592, 61.8% of the Apr 11 - May 29 downleg, has been broken, as well as 0.8624, the Apr 21 high. Above here, the next significant targets are 0.8694 and 0.8738, the Apr 14 & 11 highs respectively. GBPJPY is also extending towards an important area, located around 195.00.
- Elsewhere, the dollar index trades on a slightly firmer footing, up around 0.25% on the session as markets await the significant US employment report on Thursday. Two key factors have helped stabilise the greenback: the reversal higher for US yields from dovish extremes and an important technical support holding for the DXY, a trendline drawn across the 2011 and 2021 lows.
- Aside from the GBP weakness, NZD moderately underperforms its G10 peers, down 0.40% and consolidating back below 0.6100. Despite the moderate losses for both Aussie and Kiwi today, the medium-term bullish trends for both AUDUSD and NZDUSD have been bolstered this week ahead of RBA and RNBZ central bank decisions next week. For AUD, sights remain on key resistance at 0.6688, the US election related highs.
- US employment report and ISM services headline a packed US calendar on Thursday.
LOOK AHEAD: Thursday Data Calendar: Jam-Packed
Jul-02 16:00
Busy day tomorrow: Aside from weekly claims, Thursday's session includes the June employment report due to Friday's 4th of July holiday closure.
- US Data/Speaker Calendar (prior, estimate)
- 07/03 0830 Trade Balance (-$61.6B, -$71.0B)
- 07/03 0830 Initial Jobless Claims (236k, 241k), Continuing Claims (1.974M, 1.962M)
- 07/03 0830 Change in Nonfarm Payrolls (139k, 110k), Private Payrolls (140k, 102k)
- 07/03 0830 Unemployment Rate (4.2%, 4.3%), Participation Rate (62.4%, 62.5%)
- 07/03 0945 S&P Global US Services PMI (53.1, 53.1), Comp (52.8, --)
- 07/03 1000 ISM Services Index (49.9, 50.7), Prices Paid (68.7, 68.6)
- 07/03 1000 ISM Services New Orders (46.4, --), Employ (50.7, --)
- 07/03 1000 Factory Orders (-0.5%, 0.2%), Ex-Trans (-0.5%, 0.2%)
- 07/03 1000 Durable Goods Orders (16.4%, 16.4%), Ex-Trans (0.5%, 0.5%)
- 07/03 1000 Cap Goods Orders Nondef Ex Air (1.7%, 1.7%), Ship (0.5%, 0.5%)
- 07/03 1130 Atl Fed Bostic on monetary policy, Frankfurt (text, Q&A)
- 07/03 1000 US Tsy $55B 4W & $45B 8W bill auctions
- Source: Bloomberg Finance L.P. / MNI
