Italy borrowing costs drop slightly
A fall in short-term borrowing costs for Italy was offset by elevated long-term debt costs, which dipped slightly below the 7 per cent mark.
Yields on 10-year debt dropped to 6.98 per cent, below the crucial 7 per cent level, which usually signals an impending bailout. In November, 10-year debt reached yields of 7.56 per cent.
Italy raised around €7 billion from the debt auction, but at higher rates than a short-term debt auction earlier in the week.
Kathleen Brooks, research director for the UK at Forex.com, says: “The market had been hanging on the long-term Italian debt auction today and it wasn’t the success yesterday’s short-term auction suggested it could be.
“Although yields fell, Rome only managed to shift €7 billion, lower than its €8.5 billion target.”
She adds: “Stocks are fairly static and Italian 10-year bond yields are lower, although this is on the back of rumoured ECB [European Central Bank] buying.”