Italian Bond Sale Ends with Higher Yields after Election

The first of many expected economic repercussions coming from the results of the Italian elections where not clear government seems in the cards at the moment. This will also have an impact in Spanish bond sales which could finally trigger a request for a bailout.

Italy’s borrowing costs rose sharply at an auction on Wednesday, in the first test of its ability to borrow money long-term at affordable rates after the country’s inconclusive election result.

Italy sold the new 10-year government bonds at a yield of 4.83%, up from 4.17% at its last sale in January.

The yield provides an indication of the yearly interest rate Rome would have to pay to borrow new money.

But it did sell all 6.5bn euros’ worth (£5.6bn) of 10- and five-year bonds.

The new five-year bond was sold at a yield of 3.59%, up from 2.94% in January.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza