The Dipartimento del Tesoro...>

ITALY AUCTION PREVIEW: The Dipartimento del Tesoro will tap the market for

E6.25-7.75bln on Wednesday. On offer is the new 1.00% Jul-22 BTP, as well as

taps of the 2.50% Nov-25 BTP and 2.95% Sep-38 BTP.

- BACKGROUND: Italy will target E3.5-4.0bln for the 1.00% Jul-22 BTP,

E2.0-2.5bln for the 2.50% Nov-25 BTP and E0.75-1.25bln for the 2.95% Sep-38 BTP.

At the last auction of the 2.50% Nov-25 BTP, E2.25bln was sold at an average

yield of 2.26% and bid-to-cover of 1.38x, while E1.25bln was sold at the last

auction of the 2.95% Sep-38 BTP, with an average yield of 3.90% and bid-to-cover

of 1.41x.

- RV/HISTORY: Italian BTP yields have inched lower since the beginning of the

year, while the very long-end of the curve has steepened. The 2.50% Nov-25 BTP

currently trades at a yield of 2.064% up from a YTD low of 1.954% and 180.1bps

outside the comparable EUR swap, while the 2.95% Sep-38 BTP trades at 3.352% and

212.2bps above the comparable EUR swap.

- TIMING: Results are due around 1000GMT.