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EGB Supply - W/C 16 Oct, 2023 (2/2)

  • Thursday will see Spain come to the market to hold a Bono/Olbi auction. On offer will be the 2.15% Oct-25 Obli (ISIN: ES00000127G9), the 0.80% Jul-29 Obli (ISIN: ES0000012K53) and the on-the-run 10-year 3.55% Oct-33 Obli (ISIN: ES0000012L78). We expect Spain to continue to stick to a E5.5-6.5bln auction size and again note the skew towards shorter duration lines that we saw in the September mid-month auction. The auction size will be announced this afternoon.
  • France will then come to the market to hold a medium-term OAT auction for E10.0-11.5bln. We note that unlike LT OAT auctions, the top of the range has been achieved at every MT OAT auction since March 2021. On offer will be the on-the-run 3/5-year OATs (the 2.50% Sep-26 OAT (ISIN: FR001400FYQ4) and the 2.75% Feb-29 OAT (ISIN: FR001400HI98)) alongside off-the-run 4/7-year OATs (the 2.75% Oct-27 OAT (ISIN: FR0011317783) and the 2.50% May-30 OAT (ISIN: FR0011883966)).
  • France will then conclude issuance for the week later on Thursday with a combined E1.25-1.75bln of index-linked OATs for auction: the 0.10% Mar-26 OATei (ISIN: FR0013519253), the 0.10% Mar-29 OATei (ISIN: FR0013410552) and the 0.10% Mar-36 OATi (ISIN: FR0013524014).

NET NOMINAL FLOWS: The week ahead sees redemptions of E33.4bln: most notably a formerly 7-year BTP for E16.1bln, a formerly 10-year RAGB for E12.1bln and a formerly 6-year EFSF bond for E5.0bln. Coupon payments for the week total E3.1bln of which E1.0bln are Portuguese, E0.6bln Austrian, E0.5bln are German and E0.5bln Italian. This leaves net flows for the week again relatively close to flat at an estimated negative E1.0bln versus negative E0.6bln last week.

For more on this week and next week's supply as well as a recap of last week's issuance see the PDF here.

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