Italy will come to market.....>

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

E4.5-5.75bln. On offer are the 0.35% Feb-25 BTP, 1.35% Apr-30 BTP and the Jan-25

CCTeu.

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

bid-to-cover): 0.35% Feb-25 BTP (30 Oct, E2.5bln, 0.42%, 1.38x); 1.35% Apr-30

BTP (5 Nov, E0.5bln, -1.28%, 1.76x); and the Jan-25 CCTeu (29 Aug, E1.0bln,

0.77%, 1.70x).

- RV/HISTORY: The rally in BTPs since mid-November appears to have lost some

momentum this week and the curve has been relatively flat. Spreads over bunds

have widened since October with the 10-year BTP-Bund spread trading at 156bp

from an October low of 129bp. Consumer confidence data for November (published

Wednesday) came in below market expectations, but failed to move the meter in

BTPs. Spanish and regional German CPI data for November will be published ahead

of the Italian auction, which may be a potential flashpoint. 

- TIMING: Results are due out at 1000GMT.