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SAGBs Cap Off a Firmer Week, CPI in Focus


Week Ahead (2/3): MPC appearances this week

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This week we have seen issuance from Italy, Germany, Spain and France. MNI estimates gross issuance for this week at E18.3bln, up from last week's E11.5bln.

  • Italy kicked off issuance Tuesday morning selling on-the-run 5/10-year BTPs alongside a long 7-year CCTeu. The following was sold: E2.0bln of the 0% Aug-26 BTP, E2.25bln of the 0.95% Jun-32 BTP and E1.5bln of the 0.65% Apr-29 CCTeu.
  • Germany also came to the market Tuesday, allotting E2.308bln of the 7-year 0% Nov-28 Bund in another weak German auction which had an intended issuance volume of E3bln.
  • Germany returned to the market Wednesday, allotting E2.46bln of the 0% Oct-26 Bobl with an issuance volume of E3bln. In contrast to Tuesday's auction, this result was decent.
  • Spain came to the market yesterday and sold E2.027bln nominals vs a E1.5-2.5bln target and E475mln linkers vs a E250-750mln target: E1.128bln of the off-the-run 4-year 2.15% Oct-25 Obli, E899mln of the on-the-run 10-year 0.50% Oct-31 Obli and E475mln of the 0.70% Nov-33 Obli-Ei.
  • France concluded issuance for the week Thursday selling E3.99bln of LT OATs (the top of its target range): E2.220bln of the 2.50% May-30 OAT, E677mln of the 4.50% Apr-41 OAT and E1.099bln of the 3.25% May-45 OAT.

NET NOMINAL FLOWS: There are notable redemptions in Italy (E15.2bln CTZ), Spain (E6.75bln Boni-i) and also Portugal (E1.5bln of a PGB Floater). Together these redemptions total E23.4bln while coupons for the week of E1.9bln are due (E1.6bln Italian). With gross issuance of E19.3bln, we estimate negative net flows of E7.1bln this week (in contrast to net positive flows of E9.5bln last week).

For a calendar of all announced EGB/EU/ESM/EFSF/gilt auctions see the MNI EZ/UK Bond Supply Calendar here.