Italy will come to market.....>

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

E8.0-9.5bn. On offer are the 0.40% Aug-23 BTP, 0.85% Jan-27 BTP and the 1.45%

Sep-20 BTP.

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

bid-to-cover): 0.85% Jan-27 BTP (13 May 2020, E2.5bn, 1.53%, 1.50x), 1.45%

Mar-36 BTP (9 Apr 2020, E1.25bn, 2.06%, 1.62x).

- RV/HISTORY: BTPs have sold off this week, although yields still remain far

below the March and April blow-out levels. Heightened economic uncertainty will

keep trading volatile, but expansion of the ECB's security purchase programmes

has driven down a lot of the risk premia that had previously built up in

periphery EGBs. This is a particularly heavy week of European supply with in

excess of EUR80bn in bills, EGBs and syndications. The latter in particular

continue to see particularly strong demand and suggest potential for solid

take-up of BTPs at Thursday's auction.

- TIMING: Results are due after the auction closes at 1000BST.