Italy will come to market.....>

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

E1.25-2.00bln. On offer are the Jun 21 CTZ and the 2.55% Sep-41 BTPEi.

- BACKGROUND: The Jun-21 CTZ was last re-opened on June 25 with E2.25bln sold at

an average yield of 0.43% and bid-to-cover of 1.58x. The 2.55% Sep-41 BTPEi was

also last sold on June 25 with E0.65bln sold at an average yield of 1.69% and

bid-to-cover of 2.58x.   

- RV/HISTORY: The BTP curve has resumed the bull flattening trend, broadly in

play since mid-March. The 2s30s spread has traded down to 212bp from a YTD high

of 343bp on March 7 and returning to levels last seen in 2018. Longer-term

inflation breakevens remain well anchored, with the 30-year rate holding

predominantly within a 0.90-1.10% range since June. The data calendar for

Italy/Eurozone will be light on Wednesday ahead of the auction. 

- TIMING: Results are due out shortly after the auction closes at 1000GMT