Italy come to market on.......>

ITALY AUCTION PREVIEW: Italy come to market on Thursday for a tap of

E7.25-8.75bln. On offer are the 0.35% Feb-25 BTP, the 1.35% Apr-30 BTP and the

0.0% Dec-23 CCTeu.

- BACKGROUND: Previous auction results (date, volume, average yield,

bid-to-cover): 0.35% Feb-25 BTP (30 Dec, E2.0bln, 0.61%, 1.47x), 1.35% Apr-30

BTP (30 Dec, E2.5bln, 1.35%, 1.33x)

- RV/HISTORY: BTPs have rallied sharply over the past week on the back of

intensifying concerns over the spread of Coronavirus and a likely search for

yield as perceived political risks in Italy have subsided. The curve has bull

flattened with the 2s10s spread trading down to 115bp from a January high of

146bp, while spreads over bunds have similarly narrowed. The 10-year BTP-Bund

spread trades at 135bp down from 166bp on January 7. Although there is no

significant Italian data ahead of the auction, the first slew of regional German

CPI data could be a flashpoint.

- TIMING: Auction results are due around 1000 GMT.