EUROZONE ISSUANCE: EGB Supply

• RES 4: 5040.00 High Dec 9 and a key short-term resistance 
• RES 3: 5027.00 High Dec 13      
• RES 2: 5002.00 High Dec 18 
• RES 1: 4942.00 High Jan 2          
• PRICE: 4917.00 @ 06:33 GMT Jan 6  
• SUP 1: 4829.00 Low Dec 20 and key short-term support       
• SUP 2: 4800.87 76.4% retracement of the Nov 21 - Dec 9 bull cycle      
• SUP 3: 4775.00 Low Nov 29  
• SUP 4: 4727.00 Low Nov 21 and a key support  

A bull cycle in the Eurostoxx 50 futures contract remains intact. However, the recent move down continues to highlight a corrective phase and despite the latest bounce, a short-term bear threat remains present - for now. Key short-term support has been defined at 4829.00, the Dec 20 low. A break of it would confirm a resumption of the bear cycle and open 4800.87, a Fibonacci retracement. Initial firm resistance to watch is at 4942.00, the Jan 2 high.

Austria, Germany, Spain and France are all due to hold auctions this week. We also pencil in syndications from Belgium, Ireland, Italy, Portugal and Slovenia. We estimate gross issuance for the week at E56.3bln. 

• Tomorrow, Austria will hold a 5/50-year RAGB auction with a combined E2.013bln of the 2.50% Oct-29 RAGB (ISIN: AT0000A3EPP2) and the 0.70% Apr-71 RAGB (ISIN: AT0000A2QQB6) on offer.
• Also tomorrow , Germany will sell E4.5bln of the 2.00% Dec-26 Schatz (ISIN: DE000BU22072).
• On Wednesday, Germany will return to sell E5bln of the new Feb-35 Bund (ISIN: DE000BU2Z049). The coupon will be announced tomorrow morning.
• On Thursday, Spain will hold a Bono/Obli and ObliEi auction. On offer will be a combined E5.5-6.5bln of nominals including the new 3-year 2.40% May-28 Bono (ISIN: ES0000012O59), the on-the-run 7-year 3.10% Jul-31 Obli (ISIN: ES0000012N43) and the off-the-run 20-year 2.90% Oct-46 Obli (ISIN: ES00000128C6). Alongside this E250-750mln of the 2.05% Nov-39 Obli-Ei (ISIN: ES0000012M69) will be on offer.
• Finally on Thursday, France will hold an LT OAT auction for a combined E11.0-13.0bln. This matches the largest auction size of 2024, but given this year’s higher issuance target should be no surprise. On offer will be on-the-run 10/20/30-year OATs and an off-the-run 12-year issue: the 3.00% Nov-34 OAT (ISIN: FR001400QMF9), the 1.25% May-36 OAT (ISIN: FR0013154044), the 2.50% May-43 OAT (ISIN: FR001400CMX2) and the 3.25% May-55 OAT (ISIN: FR001400OHF4).

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

• RES 4: 160.00 Round number resistance   
• RES 3: 159.45 High Jul 12
• RES 2: 159.26 0.618 proj of the Sep 16 - Nov 15 - Dec 3 price swing  
• RES 1: 158.08 High Dec 26 
• PRICE: 157.67 @ 06:43 GMT Jan 6
• SUP 1: 155.89 20-day EMA
• SUP 2: 154.44 Low Dec 19  
• SUP 3: 153.85 50-day EMA
• SUP 4: 152.46 Low Dec 13  

USDJPY continues to trade below its recent high but is holding on to the bulk of its latest gains. The trend outlook remains bullish. The recent breach of 156.75, the Nov 15 high, confirmed a resumption of the uptrend and has paved the way for a move towards 159.45, the Jul 12 high. Moving average studies are in a bull-mode position highlighting a dominant uptrend. Initial firm support is 155.89, the 20-day EMA.