Jim,

On Monday, Italy will auction up to $3 billion in 5-year notes. Think there’s any chance of a failed auction?

Like you said recently, this would all be funny if it wasn’t so sad.

Best regards,
CIGA Black Swan

CIGA Black Swan,

It wasn’t public buying that took the Italian interest rate back under 7%. It will not be public buying that determines next Monday’s auction.

Jim

Italy Bonds Rise as Senate Approves Budget Law; Debt Sale Looms
November 11, 2011, 8:54 AM EST
By Paul Dobson

Nov. 11 (Bloomberg) — Italian bonds climbed for a second day as the nation’s Senate voted for debt-reduction measures designed to shore up investor confidence and pave the way for a new government in the euro area’s third-biggest economy.

The difference in yield, or spread, between Italian 10-year securities and benchmark German bunds shrank amid speculation former European Union Competition Commissioner Mario Monti will head Italy’s administration. The nation will auction up to 3 billion euros ($4.1 billion) of five-year notes on Nov. 14. Spanish two-year yields rose to the highest since July 2008 and the Austrian-German spread widened to a record. Greece formed a unity government led by Lucas Papademos.

“Italy has a good reputation for technocrat governments to sort things out,” said Alessandro Mercuri, an interest-rate strategist at Lloyds Bank Corporate Markets in London. “For the time being the market is very happy and is likely to continue tightening the spread.”

More… ^[1]