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Italian Banks and TLTRO

20 August 2014 by HCM

The activity was muted today, and the trading range very narrow. It was expiry day for options, and iTraxx Main and iTraxx Crossover were pinned at 60bps and 250bps respectively, which were strikes with huge open positions. On the back of that, they did not provide the market with any direction. Even if variations were marginal, one sector which experienced a bit of action was financials. An Italian newspaper reported that Italy 10 biggest lenders will seek €51.8bln in TLTRO funds. Italian senior bonds rallied as investors assumed that it will mean less supply from these issuers. CDS duly followed suit and banks enjoyed a positive session across the board.