EGB Supply - W/C 29 January (1/3)

Italy, Germany, Spain, France and Belgium are all scheduled to issue in the week ahead. In addition, we pencil in Belgian and Greek syndications and but see potential for other syndications to be pulled forward to this week (particularly ESM, Italian or German). We pencil in estimated gross issuance for the week at E46.5bln, up from E22.2bln this week, but with the return of higher redemptions and coupons.

• Italy will kick off auctions for the week on Tuesday with a 5/10-year BTP and CCTeu auction. On offer will be a reopening of the 5-year 4.10% Feb-29 BTP (ISIN: IT0005566408) for a maximum of between E3.0-3.5bln (as we had expected) alongside E1.0-1.5bln of the off-the-run 10-year 4.35% Nov-33 BTP (ISIN: IT0005544082), E1.5-2.0bln of the off-the-run 11-year 3.35% Mar-35 BTP (ISIN: IT0005358806) and E1.5-2.0bln of the 1.15% Oct-31 CCTeu (ISIN: IT0005554982). We had expected the launch of a new 10-year Jul-34 BTP – but we think that there is a potential that this is now launched via syndication given the strong demand at the 7/30-year BTP syndication earlier in the month.
• Germany will also look to come to the market on Tuesday to launch E5bln of the new Mar-26 Schatz (ISIN: DE000BU22049). The coupon will be confirmed on Monday.
• Germany will return to the market on Wednesday with E4.5bln of the 10-year 2.20% Feb-34 Bund (ISIN: DE000BU2Z023) on offer.