EGB primary market: Very light supply this week – Unicredit

Research Team at Unicredit, notes that last week, EGB issuers sold EUR 17.3bn, once again more than expected as a result of the issuance of EUR 3bn of the new BTPei May22.

Key Quotes

“Demand for ILBs was relatively good. Orders for the BTPei May22 amounted to EUR 5.7bn and the Treasury issued EUR 3bn. Cover ratios at the French linker auction were good. Note, however, that both Spain and France did not sell the maximum of their announced range. There were no redemptions and coupon payments last week.

This week we expect gross issuance to be around EUR 3-3.5bn, much less than last week and very light in absolute terms. Germany will sell EUR 1bn of Bund Jul44, and Italy will sell CTZ Mar18 (we expect EUR 2-2.5bn) and BOT 6M (we expect EUR 5bn). Following last week’s launch of the new BTPei May22, there will not be any tap of linkers. Given the very light amount of supply scheduled, we would not be surprised to see unscheduled issuance (Finland might be a candidate). Liquidity will be low with EUR 3.5bn of coupon payments from France.”