Halister News

(Bloomberg) -- Italy to sell I/L 1.25% 09/2032 bonds for EU0.5b-1b at 11am CET; analysts expect dealer demand to support auction, also highlight value in breakevens.

• Barclays (Khrishnamoorthy Sooben)
  • BTPei 2041 traded very weak on the curve yday, though the auction bond didn’t price in any RV concession
  • Decision to auction 2032 issue has likely been in response to specific dealer interest; as a result, expect this supply to be easily absorbed

• UniCredit (Elia Lattuga)
  • Long-dated BTPei breakevens are at lowest level in nearly 5 yrs; 09/2032 bond trades at very attractive breakeven of ~90bp
  • In ASW, bond is ~178bps, offering sizable spread over neighboring nominal BTPs; currently trades toward cheap end of recent range

• NOTE: Citi see month-end I/L index changes to be broadly supportive of Germany, France and Italy