Mercoledì, 19 Settembre 2018

Spread yo-yos in early trading


(ANSA) - Rome, September 5 - The spread between 10-year-old
Italian bonds and the German benchmark yo-yoed in early trading
on Wednesday.
The spread, a barometer of Italy's borrowing costs, dropped
to 422.8 basis points after the opening of business but then
climbed back to 428, its closing level on Tuesday.
The pressure has eased slightly on Italy bonds this week
with the European Central Bank expected to announce plans to buy
Spanish and Italian state paper on Thursday in order to lower
those countries' high borrowing costs and ease the eurozone
On Wednesday European Council President Herman Van Rompuy
said the borrowing costs of some countries at the centre of the
eurozone debt crisis, as shown in bond spread levels, does not
reflect the economic reality of those states.
"The spread levels of some countries is not always
justified by the fundamentals (of their economies)," Van Rompuy
Van Rompuy added that the EU gave "full support" to the ECB
for it to carry out a "series of possible" actions to lower the
borrowing costs.
On Tuesday the Bank of Italy said the spread between
10-year Italian bonds and the German benchmark should be around
200 basis points, rather than its current level.
The central bank said the reason it was so high was not down
to fundamental weaknesses of the Italian economy but "contagion"
from the eurozone crisis.

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