Italy will tap the market.....>

ITALY AUCTION PREVIEW: Italy will tap the market for E6.0-7.25bln on Thursday.

On offer are the 1.75% Jul-24 BTP, 1.35% Apr-30 BTP and the Jan-25 CCTeu.

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

bid-to-cover): 1.75% Jul-24 BTP (July 30, 2019, E2.75bln, 0.80%, 1.37x); 1.35%

Apr-30 BTP (New Issue); Jan-25 CCTeu (June 27, 2019, E1.0bln, 1.95%, 1.74x).

- RV/HISTORY: Italy's ongoing political crisis has done little to dent the BTP

rally, which has intensified in recent days. The curve has bull-steepened with

the 2s30s spread dropping to 221bp from  265bp at the beginning of August.

Spreads over Germany have also narrowed with the 10-year BTP-Bund differential

falling to 173bp from an August high of 238bp. The 1.75% Jul-24 BTP currently

trades at a yield of 0.437%, the lowest level since 2017 and 98bp outside the

comparable EUR swap. Industrial sales/orders data for Jun will be published

ahead of the auction at 0900GMT.

- TIMINMG: Results are due out after the auction closes at 1000GMT.