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BTP: Long-end Outperforms On Solid Syndication Demand

BTP
CEEMEAEurozoneItalyBulletGlobalFixed Income BulletsRegionMarkets

The long-end of the Italian cash curve outperforms EGB counterparts, with today’s Oct-54 BTP syndication seeing record order books of over E130bln. The bond should price in the next hour or so. 

  • The 30-year BTP/Bund spread has tightened ~2bps today, currently at 178bps. Today’s narrowing more than retraces the light widening seen yesterday following the mandate announcement.
  • Meanwhile French, Spanish and Portuguese 30-year spreads are biased slightly wider today.
  • The 10s30s BTP curve has also flattened against the Spanish and French equivalents, now 0.2bps steeper at 61.2bps (vs +1.8bps for Spain and +1.3bps for France).
  • Scope for further 10s30s flattening in BTPs against OATs could be driven by ongoing French political/fiscal risks (which remain present even after Michel Barnier’s appointment as PM). See this post from July for more: 'French Political Risks Could See 10s30s BTPs Flatten Vs. OATs', July 17.
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The long-end of the Italian cash curve outperforms EGB counterparts, with today’s Oct-54 BTP syndication seeing record order books of over E130bln. The bond should price in the next hour or so. 

  • The 30-year BTP/Bund spread has tightened ~2bps today, currently at 178bps. Today’s narrowing more than retraces the light widening seen yesterday following the mandate announcement.
  • Meanwhile French, Spanish and Portuguese 30-year spreads are biased slightly wider today.
  • The 10s30s BTP curve has also flattened against the Spanish and French equivalents, now 0.2bps steeper at 61.2bps (vs +1.8bps for Spain and +1.3bps for France).
  • Scope for further 10s30s flattening in BTPs against OATs could be driven by ongoing French political/fiscal risks (which remain present even after Michel Barnier’s appointment as PM). See this post from July for more: 'French Political Risks Could See 10s30s BTPs Flatten Vs. OATs', July 17.