GILT TECHS: (H5) Bull Cycle Extends

• RES 4: 0.8448 High Oct 31 and reversal trigger
• RES 3: 0.8376 High Nov 19 and a bull trigger 
• RES 2: 0.8356 High Nov 27
• RES 1: 0.8312/29 50-day EMA / High Dec 27 
• PRICE: 0.8293 @ 07:04 GMT Jan 7
• SUP 1: 0.8263/23 Low Dec 31 / 19
• SUP 2: 0.8203 Low Mar 7 2022 and a major support 
• SUP 3: 0.8200 Round number support
• SUP 4: 0.8188 1.00 proj of the Oct 31 - Nov 11 - 19 price swing

EURGBP remains in consolidation mode and continues to trade closer to its recent highs. Resistance at 0.8312, the 50-day EMA, has recently been pierced. A clear breach of the average would undermine the bear dominant theme and highlight a stronger reversal. A resumption of the primary downtrend would pave the way for a move towards major support at 0.8203, the Mar 7 ‘22 low and the lowest point of a multi-year range. 

SFRZ6/Z7/Z8 fly ~2K given at 0.0

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 of which Belgium and Slovenia announced mandates yesterday. We estimate gross issuance for the week at E56.4bln. 

• Yesterday Belgium announced a mandate to issue a new 10-year OLO maturing 22 June 2035 via syndication in the “near future”. We look for the transaction syndication to be held on Tuesday, this week and had fully expected it this week and look for expect the same E7.0bln size we have seen in the past two years with some upside risk.
• Slovenia also announced a mandate to launch a 30-year SLOREP via syndication in the “near future” on Monday. We had expected a Slovenian syndication this week and had noted that we expected a 30-year SLOREP launch in 2025 in our Deep Dive publication. We look for the transaction to be held on Tuesday and pencil in a transaction size of E1.0-1.5bln. The last 30-year SLOREP launch was in October 2020 and saw a E1.0bln transaction size but given that we are not sure whether there will be a new 2035 SLOREP launched this year (or just taps of the 1.50% Mar-35 SLOREP) we think there could be scope for a larger launch than in 2020. Note that there has not been a Slovenian early January syndication which has seen a total transaction size of less than E1.5bln for a number of years (sometimes as a dual-tranche transaction).
• This morning, 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 this morning, Germany will sell E4.5bln of the 2.00% Dec-26 Schatz (ISIN: DE000BU22072).

For more details on issuance this week and next week see the full document here: EZ250107.pdf