Italy on Friday sells.........>

ITALY AUCTION PREVIEW: Italy on Friday sells E2.5bln-E3.0bln of new 0.00% Nov-20

CTZ, and E0.5bln-E1.0bln of the 1.30% May-28 BTPEi linker (re-open). 

- BACKGROUND: Italy have met 78% of planned issuance for this year, below the

89% mark of the wider eurozone. 

- HISTORY: Although the Nov-20 CTZ is a new issue, it is currently trading on

the grey market at a yield of 1.66% (via Bloomberg). At the last auction of the

1.30% May-28 BTPEi linker, E1.25bln was allotted at an average real yield of

1.55% and real cover of 1.639x.  

- RV: Italian BTPs have sold off since mid September as Rome remains at odds

with Brussels over the budget. The 2-Yr Yield is trading at 1.167%, close to

early September levels and up from 0.617% mid September. The 10-Yr is trading

71bps up since mid September at 3.4974%, with the 2s10s bear flattening in the

same time period.   

- TIMING: Results will be available shortly after auction close around 0920GMT