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The Italian Dipartimento......>

ITALY AUCTION PREVIEW
ITALY AUCTION PREVIEW: The Italian Dipartimento Del Tesoro on Thursday re-opens
Sep-25 CCTEu for E0.75-1.25bln, re-opens 2.45% Oct-23 BTP for between
E1.5-2.0bln, and re-opens 10-Yr benchmark 2.80% Dec-28 BTP for between
E1.5-2.0bln.
- BACKGROUND: Aug 30 last saw Italy re-open this trio of issues. Sep-25 CCTEu
sold at avg yield 2.31% and cover 2.77x, Oct-23 BTP sold at avg yield 2.44% and
cover 2.12x, and Dec-28 BTP sold at avg yield 3.25% and cover 1.37x. The auction
comes at a pivotal time for the Italian medium-term fiscal outlook, with the
government due to present its 2019 budget plans on Thursday.
- RV/HISTORY: Italian bonds have broadly rallied since the beginning of
September (10-Yr benchmark yield lower by some 45bps) and the curve has bull
steepened, but volatility due to 2019 budget headlines could present some
headwinds ahead of the auction.
- TIMING: Results are due shortly after the auction closes at 0920GMT.

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