Italian Bonds Seen Weathering Political Confusion: Euro Credit

Italian bond yields at two-year lows show investors are confident the rally that started after Mario Monti’s appointment as prime minister will survive an election political pundits say is tough to call.

Monti ruled out running in the Feb. 24-25 vote at a Dec. 23 press conference, while saying he would “consider” being the prime-ministerial candidate for a party that adheres to his economic agenda. The technocrat leader said his economic policy, and not just a European Central Bank backstop, has helped lower Italy’s 10-year borrowing costs by more than 250 basis points since he came to power 13 months ago.