The Dipartimento del Tesoro...>

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

E5.25-6.5bln today. On offer are the 1.75% Jul-24 BTP, the 3.00% Aug-29 BTP and

the Jan-25 CCTeu. 

- BACKGROUND: Italy has so far met over a third of the 2019 issuance target,

slightly lagging the other large euro area member states. At the last auction of

the 1.75% Jul-24 BTP, E3.75bln was allotted at an average yield of 1.71% and

bid-to-cover of 1.31x. The 3.00% Aug-29 BTP was last tapped on March 28 with

E2.75bln allotted at an average yield of 2.61% and bid-to-cover 1.40x. The

Jan-25 CCTeu was re-opened in February with E1.25bln issued at an average yield

of 1.83% and bid-to-cover of 1.62x.

- RV/HISTORY: The BTP curve has flattened since the beginning of the year on the

back of the longer-end outperforming, with the 2s10s spread narrowing to 203bp

from 227bp at the beginning of the month. The issues being tapped today trade

relatively cheap on the EUR curve with the  1.75% Jul-24 BTP trading 167.1bp

outside the comparable EUR Swap and the 3.00% Aug-29 BTP 207.2bp outside.

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