HALISTER1: Expect EU8m/bp of EGB Supply Next Week; 60% From Italy: Citi

Expect EU8m/bp of EGB Supply Next Week; 60% From Italy: Citi

(Bloomberg) -- Expect ~EUR 8 million/bp of EGB supply next week, lowest compared to previous 4 weeks, with ~60% of it from Italy at ~EUR 4.9 million/bp, Citigroup strategists including Puja Sawant write in client note.
  • EGB supply next week comes from Italy (estimated EU8.9b), Netherlands (EU0.75b-1.25b) and Germany (EU4b)
    • There are EU3.4b of coupons and EU13b of redemptions from Belgium that will be eligible for reinvestment next week
  • U.K. DMO will issue GBP0.4b of IL52 via gilt tender next Tuesday (GBP2.9million/bp)
    • There are no gilt cash flows eligible for reinvestment next week
  • Expect the 2Y-10Y sector to account for around 82% of total gross issuance (~EU55b) over next 4 weeks
    • In DV01 terms, the 10Y sector is expected to contribute the maximum (EUR 19 million/bp)
    • This is ~43% of the total issuance (~EUR 44 million/bp) over the next 4 weeks
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Puja Sawant (Citigroup Inc)

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