UPDATE 2-Italy's 30-year bond yield surges as market prepares for new deal
The yield on Italy's 30-year bond rose nine basis points after the annoucement to 3.66 percent, its highest since Jan. 17.. Matt Cairns, rates strategist at Rabobank, said that talks of early elections in Italy, in particular Deputy Prime Minister and League party leader Matteo Salvini's reported push to take leadership in his own right, will mean that Italy will need to offer an attractive concession to sell the bond.
The market would, to a point, like to see a Salvini-led government, said Cairns, because he would be supportive of tax cuts. "But whether that feeds into the structural changes the country requires would be debateable," he added. The proposed bond sale comes as concerns grow over Italy's economy. A survey showed that the Italian services sector contracted in January after two months of marginal growth, undershooting expectations that it would be flat.
Italy entered recession in the second half of 2018, capping a politically turbulent year, and manufacturing purchasing managers' index (PMI) data released last week suggested the economic malaise could continue into 2019. Other high-grade euro zone government bond yields dipped in late trade, pulling back from earlier highs prompted by a surge in European equities.
Germany's 10-year government bond yield was last down 1.4 basis points on the day at 0.167 percent, having hit a high of 0.206 perecent after the release of better than expected euro zone data.. Demand for high-quality assets was also evident in Finland's syndicated sale of 10-year bonds on Tuesday.
The country's debt agency received more than 21 billion euros ($23.95 billion) of orders at one stage for the three billion euro September 2019 issue. Though that fell to 14.5 billion euros as lead managers adjusted the price, it is still a record for Finland. The final release of the euro zone purchasing managers' index survey was better than the initial reading released earlier in the month, though it still shows that euro zone businesses are expanding at their weakest rate since mid-2013.
Other high-grade euro zone bonds were down 1-2 bps on the day. ($1 = 0.8767 euros) (Reporting by Abhinav Ramnarayan Editing by David Goodman)
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
- READ MORE ON:
- Matt Corby
- Italian Renaissance
- Italian seasoning
- Italian sausage
- Matteo Renzi
- Matteo Salvini
- Bruno Vespa
- Deutsche Bank
- Savings bank
- Online banking
- BNP Paribas
- BNP Paribas Fortis
- BNP PARIBAS Réunion SA
- Goldman Sachs
- Product recall
- Volcanic ash
- Crédit Agricole
- Crédit Agricole Atlantique Vendée
- Provence-Alpes-Côte d'Azur
- War Room
ALSO READ
"Who even believes what Rahul Gandhi says?": MP CM Mohan Yadav on Congress leader's 'country will be on fire' remark
Investigative agencies being misused across country: Pinarayi Vijayan
Historic progress in every field in country during PM Modi's tenure: Jairam Thakur
There is widespread tyranny in country, all of us are with CM Arvind Kejriwal: AAP leader Sanjay Singh at party headquarters.
Former DRDO chief Satheesh Reddy attends 'Inspire Hyderabad' event, appreciates country's progress in defence technology