Italian BTP auctions: helped by three-year LTRO?
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Italian BTP auctions: helped by three-year LTRO?

Analysts say Italian BTP auctions netted slightly better than last month but were "not overwhelming"

Italy has sold €3.75 billion in 10-year bonds at a yield of 5.5%, down from 6.08% in January.

Marc Ostwald, financial markets strategist at Monument Securities, reflects other analysts' opinions when saying:

"Cover as ever not overwhelming but on net slightly better than in January, and
more importantly the full target volume of €6.25 billion was achieved.

"Key positive given the general lack of concession building (i.e. raising yields)
in the BTP curve as a whole ahead of today's sale were that the yields were
below market levels."

However, Ostwald says "it would be tenuous to argue that tomorrow's three-year LTRO gave a boost to the sale":


"As a general point, the BTP curve remains very steep, and thus offers Italian banks and fund managers very attractive carry. One wonders, when the central bank liquidity music stops, whether most government curves will have to be this steep. Equally, Italy and the eurozone are by no means out of the woods yet, so this is again a battle won in a long ongoing war."

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