The Italian government has succeeded in completing a "very encouraging" auction of €5.6bn worth of fresh bonds, showing investors still have appetite for the country's debt despite a weekend of political upheaval and yesterday's market slump.
Fears of a snap election in Italy as soon as August led to a sharp sell-off in Italian bonds and equities on Tuesday (29 May) and sent yields on two-year and five-year government bonds soaring, while contagion spread to global markets. Today's bond auction was seen as a test of investor confidence in Italy and was successful, although it means Italy will pay a notably higher yield of 2.32%, 2% and 3%, for five-year, seven-year and ten-year bonds respectively, according to the FT. Seema Shah, global investment strategist at Principal Global Investors, said the demand at the auction was...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes