Italian Sovereign

Italy kick-started a series of auctions this week by selling near the upper end of its target of inflation linked paper on Tuesday.

Italy’s medium to long term yields fell at auction for the first time in four months on Monday, as Greece struck a deal with its creditors — but there could be even greater gains ahead for the eurozone periphery.

Italy auctioned 10 year debt on Thursday at its highest yield this year, despite a rally in periphery eurozone debt a day earlier.

A tantalising glimpse of a final resolution to Greece’s negotiations with its creditors sent periphery eurozone yields plunging on Wednesday, ahead of an Italian auction on Thursday.

Spain’s Electricity Deficit Amortisation Fund (FADE) has mandated banks for a first syndication in over a year — despite periphery eurozone yields suffering a rocky week.

Italy has closed a long dated private placement — its second this month — as Portugal and Spain cue up auctions for the coming days.

The Banca d’Italia announced on Monday that it was prepared to offer its stock of securities bought under the public sector purchase programme (PSPP) into the market for a much lower price than the other central banks using the scheme.

A eurozone wide bond sell-off over the past two weeks took its toll on Italy on Wednesday, as it auctioned bonds at yields last seen several months ago.

The prospect of European Central Bank quantitative easing failing to suppress eurozone borrowing costs sent panic through the sovereign, supranational and agency sector this week amid a savage sell-off across European debt markets.

Italy could sell debt at a negative yield during a bill auction on Tuesday — a day after it sold two year paper at a euro-era low.

The Greek government’s tapping of state enterprises for cash this week staved off fears of imminent default — but other periphery issuers may still speed up supply as worries persist.

Portugal extended the average life of its debt with an exchange offer on Thursday, as another volatile week for Greece failed to impact steadying yields for the rest of the periphery.