GERMAN DATA: Consumer Confidence Falls to Lowest Value Since April

• RES 4: 159.45 High Jul 12  
• RES 3: 159.26 0.618 proj of the Sep 16 - Nov 15 - Dec 3 price swing
• RES 2: 158.08/87 High Jan 15 / 10 and the bull trigger 
• RES 1: 156.82 50.0% retracement of the Jan 10 - 21 bear leg      
• PRICE: 156.03 @ 06:54 GMT Jan 27
• SUP 1: 155.15/154.97 50-day EMA / Trendline drawn from Sep 16 low
• SUP 2: 154.44 Low Dec 19
• SUP 3: 153.76 50.0% retracement of the Dec 3 - Jan 10 bull leg  
• SUP 4: 153.16 Low Dec 17    

The primary trend condition in USDJPY is unchanged, it remains bullish and the latest pullback appears corrective. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Support to watch is 155.15, the 50-day EMA (pierced), and 154.97, a trendline drawn from the Sep 16 ‘24 high. A clear breach of both levels would highlight a stronger reversal. Key resistance and the bull trigger is 158.87, the Jan 10 high.

• On Thursday, Italy will hold an auction to sell 5/10-year BTPs and a CCTeu. Details will be announced later today. We look for the on-the-run 5-year 3.00% Oct-29 BTP (ISIN: IT0005611055) to be on offer alongside 1-2 off-the-run BTPs in the 10-year area. We don’t have a strong conviction surrounding the CCTeu that will be on offer.
• We pencil in a German 30-year Bund syndication on Tuesday. We expect a similar size to last year (E6bln with E1bln retained). This avoids the Fed / ECB decision days and keeps it in January ahead of the next round of inflation data. Furthermore, a transaction this week would be before any US tariffs start while there's also been huge demand at other recent Eurozone syndications so there is incentive to get a syndication completed now as it should be cost effective with a tight spread to benchmark/swaps. There is also a gap in the auction calendar next week (W/C 3 February) – however, this coincides with the Winter holidays in some regions, so we still favour this week. 

NOMINAL FLOWS: This week sees E21.8bln of redemptions of which E21.3bln are from a formerly 5-year Spanish Bono and E0.4bln are from a LATVGB. Coupon payments for the week total E4.1bln of which E2.6bln are Spanish, E1.0bln are Greek, E0.3bln are Italian and E0.2bln are Austrian. This leaves estimated net flows for the week at positive E15.5bln, vs positive E56.5bln last week.

For more on last week's issuance and a look ahead to next week see the MNI EGB Issuance, Redemption and Cash Flow Matrix here.

• RES 4: 5335.43 1.618 proj of the Nov 21 - Dec 9 - 20 price swing
• RES 3: 5327.90 1.764 proj of the Dec 20 - Jan 8 - 13 price swing      
• RES 2: 5298.50 1.500 proj of the Nov 21 - Dec 9 - 20 price swing
• RES 1: 5276.00 High Jan 24          
• PRICE: 5178.00 @ 06:33 GMT Jan 27  
• SUP 1: 5146.00 Low Jan 21           
• SUP 2: 5086.38 20-day EMA    
• SUP 3: 5005.46 50-day EMA
• SUP 4: 4931.00 Low Jan 13 and a key short-term support  

A bull cycle in the Eurostoxx 50 futures contract remains intact and the move lower from Friday’s high, is considered corrective. The move down is allowing an overbought trend condition to unwind. Moving average studies are in a bull-mode set-up that highlights a dominant uptrend. The first important support to watch is 5086.38, the 20-day EMA. A resumption of the uptrend would open 5298.50, a Fibonacci projection.