EUROZONE ISSUANCE: EGB Supply - W/C 3 Feb (2/2)

Syndications likely in the week:

• Belgium: We pencil in a 30-year Jun-56 OLO in the first half of 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.
• Germany: We pencil in a 30-year Bund syndication. We expect a similar size to last year (E6bln with E1bln retained). We had thought that the syndication might come this week but with the ECB decision today we think next week now looks more likely. There is a gap in the auction calendar in next week – though this coincides with the Winter holidays in some regions, so holding off until later cannot be ruled out.
• Italy: 15-year BTP: We look for a 2040 BTP to be launched via syndication in February. 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.

NOMINAL FLOWS: The upcoming week sees E17.8bln of redemptions from a formerly 8-year Italian CCTEU. Coupon payments for the week total E6.8bln of which E5.2bln are Italian, E1.3bln are from EU-bonds and E0.2bln are Austrian. This leaves estimate net flows for the week at positive E16.3bln, up slightly from positive E14.9bln this 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.