Italian Sovereign

Italy suffered a slight rise in its two year yields at an auction of zero coupon paper on Thursday, ahead of a sale of longer dated paper early next week.

CNH Industrial, the US-Italian maker of agricultural and construction machinery and trucks rated Ba2/BB+, prioritised price over size for its euro bond return on Monday.

Italy has taken another step to limit institutional participation in its retail focused BTP Italia bonds, introducing an allotment element for the first time. The sovereign released the details ahead of a series of auctions later in the week.

CNH Industrial, the US-Italian maker of agricultural and construction machinery and trucks, issued price guidance on Monday for a new euro seven year benchmark bond.

This week's scorecard covers the funding progress of selected sovereign issuers. Read on to see which are over the 80% mark.

Italy set new lows in its five year and 10 year yields at an auction on Thursday morning, but the result could have been very different if the sale had come just a few hours later. Shortly after the auction, Ukraine president Petro Poroshenko cancelled a visit to Turkey after claiming that Russia had moved troops into the east of his country, widening spreads between the eurozone core and periphery as investors sought the safest of assets.

Italy is almost certain to set new records at a bond auction on Thursday, after its yields screamed down in secondaries this week — a trend that is set to grow stronger next week, said analysts. Thursday’s auction will be the third time the sovereign takes advantage of a heavily bid market this week, after breaking records at a bill auction on Wednesday and a zero coupon bond auction on Tuesday.

Eurozone periphery sovereigns had the best possible start to the traditionally busy funding period of late August and September, after comments from European Central Bank president Mario Draghi helped push down their yields in secondaries.

This week's scorecard covers the funding progress of sovereign issuers, with all of the eurozone periphery comfortably ahead in their programmes despite some wobbles in secondaries over the past month.

Eurozone periphery sovereigns enjoyed a boon ahead of bill auctions next week, as their spreads tightened versus Bunds on Thursday morning — despite German yields hitting record lows — following miserable growth revealed in second quarter GDP data for the currency bloc.

Italy crunched down its short term borrowing costs at an auction on Tuesday, while Greece sold three month bills at the same yield a month ago. Italy’s yields were also down across the curve during the week — boding well for the traditionally busy month of September, when bankers believe the sovereign will sell another syndication — despite poor economic forecasts for the country.

Spain could benefit at a bond auction this week from poor growth figures from Italy, as investors’ attention is likely to shift to the faster growing of the eurozone periphery countries. But any boon for Spain would be a rare glimmer of joy amid a disappointing week for peripheral sovereigns’ yields.