BTP TECHS: (Z5) Monitoring Resistance

For the full MNI Supply Daily document with a look ahead to the next two weeks of issuance, click here.

Germany is due to hold auctions this week, while Finland has already held an auction. We pencil in issuance of just E6.5bln in the week, down from E24.5bln last week.

• Germany will come to the market today with E5bln of the 10-year 2.60% Aug-35 Bund (ISIN: DE000BU2Z056).
• Cancelled auction: The MEF has announced that it will not hold the 3/7/15+ year BTP auction that had been scheduled for 13 August. This is in line with recent convention and is not unexpected. The MEF noted that this decision was taken “considering the cash management activity”.

NOMINAL FLOWS: This week sees E43.9bln of redemptions, of which E30.5bln is from a formerly 10-year Bund and E13.4bln from a formerly 3-year BTP. Coupon payments for the week total E6.3bln of which E5.5bln are German and E0.8bln are Italian. This leaves estimated net flows for the week strongly negative at negative E43.8bln, versus positive E23.5bln last week.

Germany, France, Spain, Italy and Belgium have sold bills this week. We expect issuance to have been E22.4bln in first round operations, down from E28.1bln last week.