On Monday, Italy taps 0.95%...>

ITALY AUCTION PREVIEW: On Monday, Italy taps 0.95% Mar-23 BTP for E1.5-2.0bln

and Sep-25 CCTeu for E1-1.5bln, and sells a new 2.8% Dec-28 BTP for E3-4bln.

- BACKGROUND: The last time they were tapped (28 Jun), Mar-23 BTP sold at 1.82%

avg yld and 1.3x cover, and Sep-25 CCTeu at 1.67% avg yld and 1.6x cover. The

last 10-Yr sale was also 28 Jun, as Feb-28 sold at 2.77% avg yld and 1.3x cover.

- RV/HISTORY: BTP spreads moved wider on Friday preceding the auction amid

renewed political concerns including M5S` Beppe Grillo calling for a referendum

on the euro (though that interview appears to have been published on Jul 23) and

denials from PM Conte that Fin Min Tria would be ousted. 10-Yr BTP yields at

2.74% are touching July highs and remain well wide of Bunds at 203bps, up from

the July low of 186bps but well below May crisis highs of 263bps. Likewise, the

Mar-23 yield is up 24bps from one week prior, at 1.83%. But with net cash flow

negative in the week of the auction to the tune of E37bln, including E26.8bln

returned to market by Italy (E2.8bln in coupons and E24bln in redemptions),

there looks to be ample support to BTP sales from a net supply perspective.

- TIMING: Auction results are due after the auction closes around 0920GMT.