Italy's Dipartimento Del......>

ITALY AUCTION PREVIEW: Italy's Dipartimento Del Tesoro taps 0.05% Apr-21 BTP for

E1.5-E2.0bn, 1.45% May-25 BTP for E1.75-E2.25bn and the 3.25% Sep-46 BTP and

3.45% Mar-48 BTP for E1.0-E1.5bn.

- BACKGROUND: The total size of the mid-month BTP auction is well down on

average for this year at E5.75bln vs E8bln and is seen as helping get the

auction through following turbulent time in BTP markets in last couple of weeks

- RV/HISTORY: Overall the BTP curve has bear flattened since the last mid-month

BTP auction with 3-yr Apr-21 up 113bps to 1.254%, the 7-yr May-25 up 106bps to

2.429% and Sep-46 and Sep-48 up circa 55bp at 3.45% and 3.55% respectively. BTP

spreads have obviously blown out in past couple weeks, but they are off

multi-year highs as confidence slowly creeps back. 3-yr Bono/BTP spread is now

131bps vs high of 260.5bps seen on May 29, 7-yr Bono/BTP spread is at 158bps vs

199bps last week. While 30-yr Bono/BTP spread is at 99bps vs high of 105.5bps

also seen last week. The 3-yr and 7-yr BTPs were tapped last month, while the

Mar-48 BTP was tapped in April. The Sep-46 was last tapped in March 2017

- TIMING: Auction cut-off is 1000BST, results are around 1015BST.