MARKET TALK: Italy, Spain In Sharp Focus This Week -Citi

Italy and Spain will be in sharp focus this week, with Italian GDP numbers due at 0900 GMT and Italian and Spanish debt auctions due Tuesday, Wednesday and Thursday, Citi says. Any downside surprises to Italy's growth will add to the euro's headwinds as the debate over the suitability of fiscal austerity at any cost intensifies, it notes. The upcoming BTP and Bono auctions--especially the latter--will reveal the post-Greek PSI level of demand for peripheral paper, it adds. "At the current junction, the very generous second 3y LTRO would seem to point at resilient private demand for sovereign debt. That said, however, concerns about chronic fiscal deficits in the periphery could dampen investor willingness to add to their Bono and BTPs exposure." EUR/USD trades at 1.3108.(