Italy returns to the market...>

ITALY AUCTION PREVIEW: Italy returns to the market for the second time this week

to issue E6.25-7.50bln of 5/10-year BTPs and 5-year CCT-EU. Despite the recent

coronavirus concerns in Northern Italy, there should be some support from the

E9.5bln in redemptions due in Italy this week.

- E2.0-2.5bln of the 0.35% Feb-25 BTP is on offer. This BTP was last on offer on

Jan 30 with E2.75bln issued at an average yield of 0.31% and a bid-to-cover of

1.36x. As coronavirus concerns have picked up, prevailing yields have risen

around 7bp above the level of the last auction. Prior to today's auction the

issue size stood at E14.2bln.

- E3.5-4.0bln of the 0.95% new Aug-30 BTP is on offer. The current 10-year

benchmark, the 1.35% Apr-30 BTP has seen yield rise over 1% over the past couple

of days. With today seeing the launch of a new 10-year BTP, the auction size

will be a little higher than last month's E3.25bln. Bid-to-cover was 1.24x last.

- E0.75-1.00bln of the 0.95% Apr-25 CCT will be issued, increasing the amount

outstanding to E17.3-17.5bln. The prevailing yield at the time of writing was

0.85%.