On Friday the Dipartimento....>

ITALY AUCTION PREVIEW: On Friday the Dipartimento del Tesoro will tap the market

for a combined E3.25bln-E4.75bln. On offer are the 0.00% Nov-20 CTZ, 0.10%

May-23 BTPEi, and 1.25% Sep-32 BTPEi. 

- HISTORY: Results of the last auction of the above bonds are listed below: 

0.00% Nov-20   CTZ: average yield 0.37%, cover 1.47x, on 25/01/19. 

0.10% May-23 BTPEi: average yield 1.45%, cover 1.65x, on 27/11/18.

1.25% Sep-32 BTPEi: average yield 1.65%, cover 1.75x, on 25/09/18. 

- BACKGROUND: Yields fell across the Italian curve on Thursday as strong French

PMI data starved off fear of a French recession. Helped further by poorer than

expected German PMI data, the 10yr BTP spread Vs Bunds narrowed 7.9bps to

268.1bps. 

Overall Eurozone fundamentals remain poor in the short term and BTP spreads Vs

Bunds are more likely to stretch than get any tighter.

The Nov-20 CTZ currently trades at a yield of 0.681%, May-23 BTPEi at 1.112%,

and Sep-32 BTPEi at 2.217%.   

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