***Earlier this week, we highlighted that......>

BTPS: ***Earlier this week, we highlighted that Italian banks had been large

sellers of debt according to official data and this fact has sparked a number of

articles and research reports. Today, we want to point out that the domestic

mutual fund flows show an opposing picture.

- Data from Assogestioni, the Italian mutual fund body show that funds collected

E56.5bln of funds in the first half of the year.

- Within the E43.5bln that found its way into 'fondi aperti' (open funds) and

for which we have a breakdown, E20bln went into bond funds, E9bln into flexible

and E10bln into balanced. Naturally, with so many non-Italian mutual fund

companies operating in Italy these days, the likelihood that these flows end up

in BTPs is lower than it used to be in the past. Yet, the numbers are decent. 

- For comparison, the Italian State budget deficit should be close to E40bln in

2017.