Italian Sovereign

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.

Spain highlighted on Thursday the retracement in yields since the launch of eurozone quantitative easing, as it paid to borrow at pre-QE prices.

Greece’s protracted negotiations with its international creditors stifled potential peripheral eurozone syndications this week — and the one issuer that did come had to take a defensive approach.

Italy crunched down its borrowing costs to new lows at auction on Thursday — and unveiled its issuance plans for the second quarter of the year.

Italy showcased the rampant demand at the long end of the euro curve with a record equalling €8bn deal this week — but also highlighted new hedge fund behaviour.

A European sovereign and agency have opted to bring euro benchmarks at the long end of the curve on Tuesday, after hiring lead managers on Monday.

The lonely path that Greece is wandering away from the rest of the eurozone periphery was in sharp focus at a pair of bill auctions on Wednesday.