Sabato, 20 Ottobre 2018

Spread reaches threshold set by Mario Monti


Rome, February 25 - Uncertainty around the outcome
of the Italian general election widened the spread between
Italian 10-year bonds and their German counterparts Monday to a
threshold set by outgoing premier Mario Monti.
After some significant fluctuations as election results
came in, the spread closed trading Monday at 287 basis points.
That's exactly half of what it was when ex-premier Silvio
Berlusconi was forced from office in November 2011 after
bringing Italy to the brink of financial disaster.
Monti, brought in as a caretaker premier, had said his goal
was to cut the spread in half - to 287 points.
It reached that level at the beginning of 2013, and
continued to fall to as low as 260 basis points earlier Monday
when it initially appeared the center left might win a sound
majority in the Italian election.
However, as election results continued to come in late
Monday, investors' concerns began to rise at the prospects of
Berlusconi pulling ahead in the national vote.
The spread between Italian 10-year bonds and the German
benchmark is a key gauge of market confidence in Italy's ability
to pay down its huge debt.

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