Bond yields tumble, euro spikes on report Italy to propose 2 pct deficit plan

LONDON, Dec 12 (Reuters) – Italian government bond yields tumbled and the euro jumped on Wednesday, following a report that Italy is to propose a budget deficit target of 2 percent — well below the previous target of 2.4 percent.

The closely-watched gap between Italian and German 10-year bond yields narrowed to 272 basis points, its tightest since early October.

Italy’s two-year bond yields was last down 18 basis points on the day at 0.49 percent.

The euro extended gains to rise 0.4 percent on the day at $1.1365 after the news.

 
Reuters

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Ed Moya

Ed Moya

Senior Market Analyst at OANDA
With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏
Ed Moya