Halister News

(Bloomberg) -- Italy to sell 0.3% 10/2018 for EU1.5b-2b, 0.95% 03/2023 for EU3.5b-4b, 1.65% 03/2032 for EU1b-1.5b. New 7Y close to fair value, 3Y offers value in ASW, 15Y expensive on curve given domestic demand, analysts say.

• ING (Martin van Vliet)
  • New 7Y strongly bid in the gray market on Wed., though now trades at fair value; old 7Y still trades at 1bp-2bps concession to the fitted low-coupon BTP curve
  • 3Y remains PSPP eligible for another 6-months, looks a tad cheap to the curve, also reasonably attractive in ASW terms for bank treasuries
  • BTPS 1.65% 03/2032 have been trading persistently rich to BTP, which suggests a preference of some domestic investors, notably insurance companies

• UniCredit (Elia Lattuga)
  • New 7Y offer pick-up of ~10bps vs 04/2022s; recommend buying 7Y in ASW vs 5Y
  • 3Y is close to richest outright lvl in 3-months, auction may see record low yield for 3Y; still attractive given ECB outlook
  • Recent long-end peripheral supply has been strong recently; 10s15s Italy trades near top of 6-month range; 03/2032 issue sits at cheapest end of YTD range on 10s15s30s fly

• SocGen (Marc-Henri Thoumin)
  • New 03/2023 issue offers less generous roll than last 7Y launch; 7Y sector has underperformed shorter-dated bonds in recent months
  • Potential for a strong rally in BTPs looks limited given ongoing political, fiscal concerns in peripherals
  • 3Y issue has cheapened ahead of auction, underperforming longer-dated BTPs; recommend 2018/2020 BTP steepeners vs SPGBs ** 03/2032 bond remains rich in the 15Y sector, expect limited interest in this bond