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Today, Italy sells............>

ITALY AUCTION PREVIEW
ITALY AUCTION PREVIEW: Today, Italy sells E2.5-3.0bln of the fairly new 5Y BTP
0.9% Aug-22, E2.5-3.0bln of BTP 2.05% Aug-27, E1.25-1.75bln of CCTeu 1.1%
Oct-24. 
- BACKGROUND: There are E21.2bln of Italian redemptions/coupons this week.
Month-end extensions might also provide marginal help for 10Y BTP demand.
Auction sizes are fairly elevated but are the first Italian auctions for a
month. Demand has been quite digital for BTPs lately.  
- RV/HISTORY: The CCT appears expensive, with an ASW of 109.7bp compared to
157bp for a similar maturity BTP. The Bund-BTP spread is 171bp at 10Y and is
elevated compared to the end of July but demand is thin. The 5Y BTP has has
cheapened to the shorter bonds such as the 2Y and 3Y. This is only the second
outing for this bond, The 6 auction average bid-cover for CCT auctions is 1.53x
and the yield at the latest auction was 0.82% (0.843% today). For the 5Y BTP,
equivalent numbers are 1.41x and 0.96% (compared to 2.068% yield today) and
1.43x and 2.22% (compared to 2.068% yield today) for the 10Y. 
- TIMING: Auction cut-off is 0900GMT/1000BST, results are around 0920GMT.

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