Barclays (November 28): Considers market reactions for different scenarios 1) Referendum is rejected (“NO” outcome) with low turnout (below 40%) – Italian spreads open weak on Monday; however, they are likely to reverse the move quickly into the ECB meeting where a dovish tone is expected. Scenario 2 – Referendum is rejected (“NO” outcome) with high turnout (above 40%) – Italian spreads open weak on Monday, however, should reverse at least part of the move for later in the week into the ECB meeting. Scenario 3-Referendum is approved (“YES” outcome) with low turnout (below 40%) – Italian spreads should open resiliently on Monday, with short positions being covered into the ECB meeting (which should still be dovish). Scenario 4 – Referendum is approved (“YES” outcome) with high turnout (above 40%)-Italian spreads should open notably resilient on Monday with short positions being covered into the ECB meeting.

HSBC (November 25): A "yes" vote, should see a relief rally, particularly in the sovereign bond space, also taking into account the negative net supply in December . In the event of a "no" vote, there might still be more room for the market to move down, particularly if Mr Renzi is forced out. In this case, the banking sector could be affected particularly negatively given ongoing weaknesses and recapitalisations ahead. However, we could see a correction in a couple of days. That said any relief rally , is only likely to be temporary and, after the first few months, sentiment will start to focus on who might win the upcoming elections

Citi (November 25): With base case for a “NO” vote the bank remains cautious in near term and believes BTP-Bund spreads can see 200bp- 250bp over the near-term. Political uncertainties are likely to be elevated in Q1 next year which will also see the return of supply and an ECB perhaps lowering monthly QE volumes. However, risks to this outlook – and factors that support a tightening in BTP Bund spreads in our view – would involve a (clear) YES vote at the referendum and further large scale monetary support from the ECB.

Socgen (November 24): In a “Yes” vote scenario, BTPs, should recover partially in near term but sustained rally will depend on the health of banking sectors. In terms of trades still favours selling EUR payers vs USD as ECB is likely to stick to its forward rate guidance. In case of a ‘no’ vote recommends long 10y bunds while on the Italian curve suggest entering 2s5s and 10s30s BTP steepeners

RBS (November 22): The bank considers risk being overpriced by financial markets. Still, we prefer to stay on the sidelines until the vote. Post-referendum BTPs can do well, even on ‘No’. After a initial reaction would expect BTPs to stabilize . RBS highlights that spreads are at non-crisis wide levels already, politics should prove less problematic than implied by the markets, especially with accommodative ECB.

CA (November 23): A “yes” vote should see a sharp rally in Italian spreads (short term tightening towards 140-150bp spread to Bunds while medium term can further tighten by 10bps if voting reforms are made). A no vote in short term could see sharp widening of Italian spreads (nearly 30bps at open) and a bund rally on risk aversion. In medium term 10y BTP vs. bund spreads could further widen to 1) 150-160bps if Renzi still stays the PM 2) 180- 200bps if there is a political vacuum.

MS (November 14): Bank believes that very little referendum risk premium exists in most assets and strategic (6m) hedges, that work even after the referendum, are cheap. In particular in order of prefence suggest: i) Buy Eurostoxx puts contingent on weaker EUR; ii) Buy protection on iTraxx Main vs. CDX IG; iii) Buy EURUSD 3m puts; iv) Buy iTraxx Main payer spreads; v) Short BTPs vs. European credit; vi) Long S&P 500 vs. Eurostoxx; and vii) Sell S&P 500 puts, buy Eurostoxx puts.

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