Under Pressure On Syndication Announcement

BTP futures move to fresh session lows and come under some modest widening pressure vs. Bunds & peripheral peers as the Tesoro mandates banks for the syndication of a new 15-Year BTP.

• We will follow up in due course with more details/expectations.
• Previously we had suggested that we expect Italy’s second syndication of 2024 in February (likely either W/C 5 February or W/C 12 February) with the potential for the new 10-year Jul-34 BTP to be launched following the decision to reopen off-the run 10-year issues at the 30 January auction. If a new 10-year BTP is not chosen, the most obvious gaps in the issuance schedule would be for a new 15-year BTP, 10/30-year BTPei or a new Oct-32 CCTeu (although the latter is more likely later in the year).
• This was on our radar but 1) comes ahead of “schedule” and 2) didn’t represent the most obvious target are on the curve (albeit not being too abstract as we listed it as a possibility). Both points help explain the widening.