EUROZONE ISSUANCE: EGB Supply

• Italy: 15-year BTP: We look for a 2040 BTP to be launched via syndication in February, although with a decent risk of the transaction slipping into March. We note that since 2019 a new 15-year BTP has launched in either January or February in 4/6 years (the exceptions being 2022 when it launched in May and 2023 when there was no 15-year launch at all). We look for a launch size of E8-10bln. There is also potential for a new 30-year BTP€I, although we think that is less likely until later in the year. As we note above, there is a chance that if we see a conventional BTP launch via syndication that we see the 15+ year auction cancelled. If we don’t see a syndication in the upcoming week it may be that we don’t see the next Italian syndication until March. The W/C 17 February will see the launch of the inaugural retail BTP Piu while the W/C 24 February will see auctions of BTP-ST/BTPei as well as 5/10-year BTP/CCTeu
• Slovakia: We look for a new 12-year 2037 SlovGB to launch via syndication in February. Historically, Slovakia left its first syndication of the year until April but there has been a February syndication in each of the past two years. Slovakia has not in recent years tapped an existing issue and we don’t expect that to change this year (we expect there would have been an announcement if that was the case). We pencil in a transaction size of E2.5-3.5bln.
• Spain: We expect the second Spanish syndication of 2025 to be held in February (we pencil in the upcoming week but the W/C 24 February is possible). We think that the most likely new issue would be either a 20-year 2045 Obli (there is currently no 2045 Obli) or a long 15-year 2041 Obli (there is already the 4.70% Jul-41 Obli but that was launched back in 2009 and already has E22.7bln outstanding but Spain tends to launch a new long 15-year on alternate years). In terms of other gaps on the curve, 2036 is likely to be too close to the new 10-year issues launched this year, 2038 is a possibility and then there are no other gaps until 2047.

• RES 4: 5455.00 2.00 proj of the Nov 21 - Dec 9 - 20 ‘24 price swing
• RES 3: 5434.10 2.236 proj of the Dec 20 - Jan 8 - Jan 13 price swing     
• RES 2: 5381.13 1.764 proj of the Nov 21 - Dec 9 - 20 ‘24 price swing
• RES 1: 5375.00 High Feb 6             
• PRICE: 5342.00 @ 06:33 GMT Feb 10   
• SUP 1: 5211.11 20-day EMA            
• SUP 2: 5094.95 50-day EMA
• SUP 3: 4991.00 Low Jan 15  
• SUP 4: 4931.00 Low Jan 13 and a key short-term support  

Eurostoxx 50 futures are holding on to their recent gains and a bull cycle remains in play. Last week’s gains marked  a resumption of the uptrend that started on Nov 21 ‘24. Moving average studies are in a bull mode set-up too, highlighting a dominant uptrend. The focus is on 5381.13 next, a Fibonacci projection. Initial firm support to watch lies at 5211.11, the 20-day EMA. The 50-day EMA is at 5094.95.

• Belgium: We pencil in a 30-year Jun-56 OLO in February, most likely in the upcoming week, but could possibly slip to the W/C 17 February. This would likely see the 24 February conventional auction cancelled. We look for a E5bln transaction size (consistent with the last 3 years), with some upside risk.
• France: We pencil in a French syndication in the W/C 24 February, but it could come as soon as the upcoming week. The most likely issue in our view would be a new 30-year OAT (we pencil in E8-10bln) but there is a possibility of a 3.00% Jun-49 Green OAT syndicated tap or a new OATei. The most obvious new OATei would be in the 30-year area, extending the OATei curve perhaps to 2056. There is also a bit of a gap in the curve around the 25-year area (2050). Given the launch of the 0.95% Jul-43 OATei in May 2024 we think it would be very unlikely to see a launch in the 15-20 year area. There would be space to launch a new 2035 or 2037 OATei, but with only E7.0bln nominal of the 0.60% Jul-34 OATei outstanding (that was launched in 2023) so this can also not be ruled out.
• Germany: We pencil in a 30-year Bund syndication. We expect a similar size to last year (E6bln with E1bln retained). We had originally pencilled the syndication in for either late January or the first week of February, however we think that the volatility seen post-Trump’s Canadian, Mexican and Chinese tariffs scuppered the chances for an early February syndication. We still think there is a good chance that we see the transaction take place in the upcoming week, however, with E30.5bln of a former 10-year Bund due to mature on 15 February (and with the DFA likely to want to keep a decent cash buffer).