Italy will tap the market.....>

ITALY AUCTION PREVIEW: Italy will tap the market on Thursday for E6.25-7.75bln.

On offer are the 1.00% Jul-22 BTP, 2.10% Jul-26 BTP and the 3.35% Mar-35 BTP. 

- BACKGROUND: The 1.00% Jul-22 BTP was last auctioned on March 15 with E4.0bln

sold at an average yield of 1.06% and bid-to-cover ratio of 1.49x. The 3.35%

Mar-35 BTP is the 15-year benchmark which was last tapped in January with

E10.0bln sold through syndication at an average yield of 3.41% and bid-to-cover

of 3.36x

- RV/HISTORY: BTP yields have pushed progressively lower since November and the

curve has flattened on the back of the longer-end outperforming. The economy has

been particularly affected by the regional industrial slowdown, which has

contributed to yield compression. The 1.00% Jul-22 BTP trades at a yield of

1.101% down from a recent high of 1.185% on April 4 and 122.6bp outside the

comparable EUR swap. The 3.35% Mar-35 BTP trades at 3.012%, marking a fresh low

for this issue. 

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