SCHATZ TECHS: Z5) Bear Trend Remains Intact

Germany will hold a 10-year Bund auction today while Italy and Finland will look to come to the market during the remainder of this week. Finland and Slovakia have held syndications yesterday, while Belgium, Germany and Italy already have held auctions this week. We pencil in issuance of E28.2bln for the week, a little lower than the E30.8bln sold last week. 

For the full MNI EGB Supply Daily with a recap of issuance this week and a look ahead to the rest of the week's issuance and next week's issuance, click here.

• Germany will return to the market today with E4.5bln of the 10-year 2.60% Aug-35 Bund (ISIN: DE000BU2Z056).
• Tomorrow, Italy will look to hold a 5/10-year BTP / CCTeu auction. On offer will be E2.5-3.0bln of the on-the-run 5-year 2.85% Feb-31 BTP (ISIN: IT0005671273), E4.0-4.5bln of the new 3.45% Feb-36 BTP (ISIN: TBC), E0.75-1.0bln of the Oct-31 CCTeu (ISIN: IT0005554982) and E0.75-1.0bln of the Apr-32 CCTeu (ISIN: IT0005594467).
  • The launch of the new 10-year Feb-36 BTP was in line with our expectations.
• Finland will conclude the month’s issuance tomorrow by holding an ORI auction.

• RES 4: 107.348 50.0% retracement of Apr 7 - Sep 25 bear leg (cont) 
• RES 3: 107.320 High Oct 17 and the bull trigger 
• RES 2: 107.235 High Oct 22 
• RES 1: 107.175 High Oct 24   
• PRICE: 107.070 @ 06:31 GMT Oct 29
• SUP 1: 117.050 Low Oct 27   
• SUP 2: 107.014 76.4% retracement of the Sep 25 - Oct 17 bull leg    
• SUP 3: 106.995 Low  Oct 8
• SUP 4: 106.965 Low Oct 6 

A short-term bear cycle in Schatz futures remains intact and the contract is trading at its recent lows. For now, the current bear cycle that started Oct 17 is considered corrective and is allowing a recent overbought trend condition to unwind. An extension lower would open 107.014, a Fibonacci retracement, and the next important support. On the upside, initial resistance is at 107.175, last Friday’s high.

• RES 4: 0.8865 1.764 proj of the Sep 15 - 25 - Oct 8 price swing  
• RES 3: 0.8848 1.618 proj of the Sep 15 - 25 - Oct 8 price swing  
• RES 2: 0.8835 High May 3 2023
• RES 1: 0.8796/8800 1.0% 10-dma Env. / Round number resistance 
• PRICE: 0.8787 @ 06:47 GMT Oct 29
• SUP 1: 0.8751 High Sep 25  
• SUP 2: 0.8710 20-day EMA 
• SUP 3: 0.8688 50-day EMA
• SUP 4: 0.8656 Low Oct 8 and a key support  

A bull trend in EURGBP remains intact. Tuesday’s strong gains resulted in a clear break of resistance 0.8769, the Jul 28 high and a bull trigger. This confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. Sights are on the 0.8800 handle where a break would open 0.8835, the May 3 2023 high. Initial support lies at 0.8751, the Sep 25 high.