The Italian Dipartimento......>

ITALY AUCTION PREVIEW: The Italian Dipartimento Del Tesoro on Tuesday re-opens

the Sep-25 CCTeu for E0.5-E1.0bln, 2.45% Oct-23 BTP for E1.5-E2.0bln and the

10-Yr benchmark 2.80% Dec-28 BTP for E2.0-E2.5bln. 

- BACKGROUND: The Sep 27 auction was the last time Italy saw these bonds issued.

The Sep-25 CCteu sold at an average yield of 1.77% with cover of 1.67x, the

Oct-23 BTP sold at an average yield of 2.03% with cover of 1.42x, and the Dec-28

BTP sold at an average yield of 2.90% with cover of 1.44x.   

- RV/HISTORY: Italian bonds have rallied following two relatively favourable

sovereign credit rating decisions. Moody's downgraded Italy with stable outlook,

while S&P maintained the existing credit rating but with negative outlook. In

both cases, Italy's sovereign rating remains investment grade. The 2s10s curve

has bull steepened since the Friday close with the benchmark 10-year yield down

15bps alongside a 20bps fall in the 2-year yield. However, with Rome and

Brussels continuing to square off over the contentious budget, any relief for

BTPs is likely to prove short lived. 

- TIMING: Results will be due shortly after the auction closes at 0920GMT.