Italy will come to market.....>

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

E5.25-7.75bln. On offer are the 0.05% Jan-23 BTP, 0.85% Jan-27 BTP and the 3.10%

Mar-40 BTP.

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

bid-to-cover): 0.05% Jan-23 BTP (Nov 13 2019, E2.5bln, 0.22%, 1.53x), 0.85%

Jan-27 BTP (Nov 13 2019, E3.25bln, 0.91%, 1.28x ), 3.10% Mar-40 BTP (Oct 11

2019, E0.81bln, 1.78%, 2.23x).

- RV/HISTORY: Italian BTP yields have drifted higher since the beginning of the

fourth quarter and the curve has bear steepened. Inflation expectations have

similarly recovered with the 5-year breakeven pushing up to 0.607% from a

multi-year low of 0.226% posted on September 2. Trading relative to the

comparable EUR swap of the BTPs being auctioned on Tuesday: 0.05% Jan-23 BTP

(+48bp), 0.85% Jan-27 BTP (+97bp), 3.10% Mar-40 BTP (+171bp).This is a quieter

week for EGB issuance compared to the previous week and there are no major data

releases ahead of the BTP auction.  

- TIMING: Results are due out after 1000GMT.